<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 1997
REGISTRATION NO. 333-
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------------------------------
<TABLE>
<S> <C>
ML BANCORP, INC. ML CAPITAL TRUST I
(Exact name of Registrant as specified in its charter) (Exact name of Registrant as specified
in its trust agreement)
PENNSYLVANIA
(State or other jurisdiction of DELAWARE
incorporation or organization) (State or other jurisdiction of
incorporation or organization)
--------- ---------
6712
(Primary Standard Industrial 6719
Classification Code Number) (Primary Standard Industrial
Classification Code Number)
23-2752439
(I.R.S. Employer APPLIED FOR
Identification No.) (I.R.S. Employer
Identification No.)
</TABLE>
---------------------------------------------
TWO ALDWYN CENTER
LANCASTER AVENUE & ROUTE 320
VILLANOVA, PENNSYLVANIA 19085
(610) 526-6482
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
---------------------------------------------
DENNIS S. MARLO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ML BANCORP, INC.
TWO ALDWYN CENTER
LANCASTER AVENUE & ROUTE 320
VILLANOVA, PENNSYLVANIA 19085
(610) 526-6482
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
----------------------------------------
<TABLE>
<S> <C> <C>
COPIES TO:
GERARD L. HAWKINS, ESQ. WAYNE J. RAPOZO, ESQ.
ELIAS, MATZ, TIERNAN & HERRICK L.L.P. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
734 15TH STREET, N.W. 919 THIRD AVENUE
WASHINGTON, D.C. 20005 NEW YORK, NEW YORK 10022-3897
</TABLE>
=============================================
Approximate Date of Commencement of Proposed Sale to the Public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series B Capital Securities of ML Capital Trust I $50,000,000 100% $50,000,000 $15,152
- -------------------------------------------------------------------------------------------------------------------------------
Series B Junior Subordinated Deferrable Interest
Debentures of ML Bancorp, Inc.(2) $50,000,000 100% $50,000,000 N/A
- -------------------------------------------------------------------------------------------------------------------------------
ML Bancorp, Inc. Series B Guarantee with respect
to Series B Capital Securities(3) N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . $50,000,000(4) 100% $50,000,000(4) $15,152
===============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Series B Junior
Subordinated Deferrable Interest Debentures of ML Bancorp, Inc. (the
"Junior Subordinated Debentures") distributed upon any liquidation of ML
Capital Trust I.
(3) No separate consideration will be received for the ML Bancorp, Inc. Series
B Guarantee.
(4) Such amount represents the liquidation amount of the ML Capital Trust I
Series B Capital Securities to be exchanged hereunder and the principal
amount of Junior Subordinated Debentures that may be distributed to
holders of such Capital Securities upon any liquidation of ML Capital
Trust I.
---------------------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 10, 1997
PROSPECTUS
ML CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.875% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.875% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
ML BANCORP, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON AUGUST ___, 1997, UNLESS EXTENDED
---------------
ML Capital Trust I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby offers, upon the terms and subject
to the conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange up to $50,000,000 aggregate Liquidation Amount of its 9.875% Series B
Capital Securities (the "New Capital Securities") which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
to a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like Liquidation Amount of its outstanding 9.875%
Series A Capital Securities (the "Old Capital Securities"), of which
$50,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, ML Bancorp, Inc., a Pennsylvania corporation ("ML" or the
"Corporation"), also is offering to exchange (i) its guarantee of payments of
cash distributions and payments on liquidation of the Trust or redemption of
the Old Capital Securities (the "Old Guarantee") for a like guarantee in
respect of the New Capital Securities (the "New Guarantee") and (ii) all of its
outstanding 9.875% Series A Junior Subordinated Deferrable Interest Debentures
due March 1, 2027 (the "Old Junior Subordinated Debentures") for a like
aggregate principal amount of its 9.875% Series B Junior Subordinated
Deferrable Interest Debentures due March 1, 2027 (the "New Junior Subordinated
Debentures"), which New Guarantee and New Junior Subordinated Debentures also
have been registered under the Securities Act. The Old Capital Securities, the
Old Guarantee and the Old Junior Subordinated Debentures are collectively
referred to herein as the "Old Securities" and the New Capital Securities, the
New Guarantee and the New Junior Subordinated Debentures are collectively
referred to herein as the "New Securities."
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
have been registered under the Securities Act and therefore will not be subject
to certain restrictions on transfer under federal and state securities laws
applicable to the Old Securities, (ii) the New Capital Securities will not
provide for any increase in the Distribution rate thereon and (iii) the New
Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon. See "Description of New Securities" and "Description of
Old Securities." The New Capital Securities are being offered for exchange in
order to satisfy certain obligations of the Corporation and the Trust under a
Registration Rights Agreement, dated as of March 10, 1997 (the "Registration
Rights Agreement"), among the Corporation, the Trust and the Initial Purchasers
(as defined herein). In the event that the Exchange Offer is consummated, any
Old Capital Securities which remain outstanding after consummation of the
Exchange Offer and the New Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement (as
defined herein).
(Continued on the following page)
This Prospectus and the Letter of Transmittal are first being mailed to all
registered holders of Old Capital Securities as of July ___, 1997.
SEE "RISK FACTORS" COMMENCING ON PAGE 19 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD-
EQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July ___, 1997.
<PAGE> 3
(Continued from the previous page)
The New Capital Securities and the Old Capital Securities (collectively,
the "Capital Securities") represent beneficial interests in the assets of the
Trust. The Corporation is the owner of all of the beneficial interests
represented by common securities of the Trust (the "Common Securities," and
together with the Capital Securities, the "Trust Securities"). The Trust
exists for the sole purpose of issuing the Trust Securities and investing the
proceeds thereof in the Junior Subordinated Debentures (as defined herein).
The Junior Subordinated Debentures will mature on March 1, 2027 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
New Securities--Description of Capital Securities--Subordination of Common
Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of March
10, 1997, between the Corporation and The Bank of New York, as Debenture
Trustee (the "Debenture Trustee"), as amended and supplemented from time to
time, and (ii) the "Trust Agreement" means the Amended and Restated Declaration
of Trust relating to the Trust among the Corporation, as Sponsor, The Bank of
New York, as Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware), as the Delaware Trustee (the "Delaware Trustee"), the
Administrative Trustees named therein (collectively, with the Property Trustee
and the Delaware Trustee, the "Issuer Trustees"), and the holders, from time to
time, of undivided beneficial interests in the assets of the Trust, as amended
and supplemented from time to time. In addition, as the context may require,
unless otherwise expressly stated, (i) the term "Capital Securities" means the
Old Capital Securities and the New Capital Securities, (ii) the term "Trust
Securities" means the Capital Securities and the Common Securities, (iii) the
term "Junior Subordinated Debentures" means the Old Junior Subordinated
Debentures and the New Junior Subordinated Debentures and (iv) the term
"Guarantee" means the Old Guarantee and the New Guarantee.
Except as provided below, the Capital Securities will be represented by
global Capital Securities in fully registered form, deposited with a custodian
for and registered in the name of a nominee of The Depository Trust Company
("DTC"). Beneficial interests in such Capital Securities will be shown on, and
transfers thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in such Capital Securities will trade in
DTC's Same-Day Funds Settlement system and secondary market trading activity in
such interests will therefore settle in immediately available funds. The
Capital Securities will be issued, and may be transferred, only in blocks
having a Liquidation Amount of not less than $100,000 (100 Capital Securities).
See "Description of New Securities -- Description of Capital Securities --
Form, Denomination, Book-Entry Procedures and Transfer."
Holders of the Capital Securities will be entitled to receive cumulative
cash distributions arising from the payment of interest on the Junior
Subordinated Debentures, accruing from March 10, 1997, and payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
September 1, 1997 at the annual rate of 9.875% of the Liquidation Amount of
$1,000 per Capital Security ("Distributions"). The Corporation has the right
to defer payments of interest on the Junior Subordinated Debentures at any time
and from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period"),
provided that no Extension Period may end on a date other than an Interest
Payment Date (as defined herein) or extend beyond the Stated Maturity Date.
Upon the termination of any such Extension Period and the payment of all
amounts then due, the Corporation may elect to begin a new Extension Period,
subject to the requirements set forth in the Indenture. If and for so long as
interest payments on the Junior Subordinated Debentures are so deferred,
Distributions on the Trust Securities also will be deferred and the Corporation
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Corporation's capital
stock (which includes common and preferred stock) or to make any payment with
respect to debt securities of the Corporation that rank pari passu with or
junior to the Junior Subordinated Debentures. During an Extension Period,
interest on the Junior Subordinated Debentures will continue to accrue (and the
amount of Distributions to which holders of the Trust Securities are entitled
will
2
<PAGE> 4
(Continued from the previous page)
accumulate) at the rate of 9.875% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of New
Securities--Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue Discount."
The Corporation has, through the Guarantee, the guarantee agreement of the
Corporation relating to the Common Securities (the "Common Guarantee"), the
Trust Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Trust Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee and the Common Guarantee guarantee
payments of Distributions and payments on liquidation or redemption of the
Trust Securities, but in each case only to the extent that the Trust holds
funds on hand legally available therefor and has failed to make such payments,
as described herein. See "Description of New Securities--Description of
Guarantee." If the Corporation fails to make a required payment on the Junior
Subordinated Debentures, the Trust does not have sufficient funds to make the
related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee do not cover any such payment when the Trust
does not have sufficient funds on hand legally available therefor. In such
event, under the Indenture a holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights in respect of
such payment. See "Description of New Securities--Description of Junior
Subordinated Debentures--Enforcement of Certain Rights By Holders of New
Capital Securities." The obligations of the Corporation under the Guarantee,
the Common Guarantee and the Junior Subordinated Debentures are unsecured and
rank subordinate and junior in right of payment to all Senior Indebtedness of
the Corporation to the extent and in the manner set forth in the Indenture.
See "Description of New Securities--Description of Junior Subordinated
Debentures--Subordination." In addition, because the Corporation is a holding
company, the Junior Subordinated Debentures and the Guarantee effectively are
subordinated to all existing and future liabilities, including deposits, of the
Corporation's subsidiaries.
The Trust Securities are subject to mandatory redemption in a Like Amount
(as defined herein), (i) in whole but not in part, on the Stated Maturity Date
upon repayment of the Junior Subordinated Debentures at a redemption price
equal to the principal amount of, plus accrued interest on, the Junior
Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole but
not in part, at any time before March 1, 2007 (the "Initial Optional Prepayment
Date"), contemporaneously with the optional redemption of the Junior
Subordinated Debentures, upon the occurrence and continuation of a Special
Event (as defined herein) at a redemption price equal to the Special Event
Prepayment Price (as defined below) (the "Special Event Redemption Price") and
(iii) in whole or in part, on or after the Initial Optional Prepayment Date,
contemporaneously with the optional redemption by the Corporation of the Junior
Subordinated Debentures, at a redemption price equal to the Optional Prepayment
Price (as defined below) (the "Optional Redemption Price"). Any of the
Maturity Redemption Price, the Special Event Redemption Price and the Optional
Redemption Price may be referred to herein as the "Redemption Price." See
"Description of New Securities--Description of Capital Securities--Redemption."
Subject to the Corporation having received any required regulatory
approval, the Junior Subordinated Debentures will be prepayable prior to the
Stated Maturity Date at the option of the Corporation (i) on or after the
Initial Optional Prepayment Date, in whole or in part, at a price (the
"Optional Prepayment Price") equal to 104.937% of the principal amount thereof
on the Initial Optional Prepayment Date, declining ratably on each March 1
thereafter to 100% on or after March 1, 2017, plus, in each case, accrued and
unpaid interest thereon to the date of prepayment, or (ii) at any time prior to
the Initial Optional Prepayment Date, in whole but not in part, upon the
occurrence and continuation of a Special Event, at a prepayment price (the
"Special Event Prepayment Price") equal to the Make-Whole Amount (as defined
below). The "Make-Whole Amount" shall be equal to the greater of (a) 100% of
the principal amount of the Junior Subordinated Debentures or (b) the sum,
3
<PAGE> 5
(Continued from the previous page)
as determined by a Quotation Agent (as defined herein), of the present values
of the remaining scheduled payments of principal and interest on the Junior
Subordinated Debentures, discounted to the prepayment date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined herein) plus, in the case of each of clauses
(a) and (b), accrued and unpaid interest thereon to the date of prepayment.
Either of the Optional Prepayment Price or the Special Event Prepayment Price
may be referred to herein as the "Prepayment Price." See "Description of New
Securities--Description of Junior Subordinated Debentures--Optional Prepayment"
and "--Special Event Prepayment."
The Corporation has the right at any time (including without limitation
upon the occurrence of a Tax Event (as defined herein)) to terminate the Trust
and, after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause a Like Amount of the Junior Subordinated Debentures to
be distributed to the holders of the Trust Securities in liquidation of the
Trust, subject to (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to holders of
Capital Securities and (ii) the receipt of any required regulatory approval.
Unless the Junior Subordinated Debentures are distributed to the holders of the
Trust Securities, in the event of a liquidation of the Trust as described
herein, after satisfaction of liabilities to creditors of the Trust as required
by applicable law, the holders of the Trust Securities generally will be
entitled to receive a Liquidation Amount of $1,000 per Trust Security plus
accumulated and unpaid Distributions thereon to the date of payment. See
"Description of New Securities--Description of Capital Securities--Liquidation
of the Trust and Distribution of Junior Subordinated Debentures."
------------------
The Trust is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust within the meaning of Rule
405 under the Securities Act (an "Affiliate") or who intends to participate in
the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (i) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (ii) will not
be entitled to tender such Old Capital Securities in the Exchange Offer and
(iii) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other transfer of such Old
Capital Securities (other than pursuant to the Exchange Offer) unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such Participating Broker-Dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
4
<PAGE> 6
(Continued from the previous page)
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate of the Corporation or the Trust, (ii)
any New Capital Securities to be received by it are being acquired in the
ordinary course of its business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Capital Securities, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New
Capital Securities. The Letter of Transmittal contains the foregoing
representations. In addition, the Corporation and the Trust may require such
holder, as a condition to such holder's eligibility to participate in the
Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) on behalf of whom such holder holds Old Capital
Securities to be exchanged in the Exchange Offer. Each Participating
Broker-Dealer that receives New Capital Securities for its own account pursuant
to the Exchange Offer will be deemed to have acknowledged by execution of the
Letter of Transmittal or delivery of an Agent's Message (as defined herein)
that it acquired the Old Capital Securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Corporation and the Trust
believe that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale
of such New Capital Securities. Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Capital Securities received in exchange for Old Capital Securities where
such Old Capital Securities were acquired by such Participating Broker-Dealer
for its own account as a result of market-making or other trading activities.
Subject to certain provisions set forth in the Registration Rights Agreement,
the Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (as defined herein) (subject to
extension under certain limited circumstances described below) or, if earlier,
when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "The Exchange Offer--Exchange Agent." Any person, including any
Participating Broker-Dealer, who is an Affiliate of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer--Resales of
New Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message, that,
upon receipt of notice from the Corporation or the Trust of the occurrence of
any event or the discovery of any fact which makes any statement contained or
incorporated by reference in this Prospectus untrue in any material respect or
which causes this Prospectus to omit to state a material fact necessary in
order to make the statements contained or incorporated by reference herein, in
light of the circumstances under which
5
<PAGE> 7
(Continued from the previous page)
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus
in connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the
Corporation or the Trust has given notice that the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. There can be no assurance as to the development or liquidity of any
market for the New Capital Securities. The Corporation and the Trust currently
do not intend to apply for listing of the New Capital Securities on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of Old
Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders to provide for registration
under the Securities Act of the Old Capital Securities held by them. To the
extent that Old Capital Securities are tendered and accepted in the Exchange
Offer, a holder's ability to sell untendered Old Capital Securities could be
adversely affected. See "Risk Factors--Consequences of a Failure to Exchange
Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on August ___, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
provisions of the Registration Rights Agreement. Old Capital Securities may be
tendered in whole or in part having an aggregate Liquidation Amount of not less
than $100,000 (100 Capital Securities) and/or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof. The Corporation
has agreed
6
<PAGE> 8
(Continued from the previous page)
to pay all expenses of the Exchange Offer. See "The Exchange Offer--Fees and
Expenses." Holders of New Capital Securities as of the record date for the
payment of Distributions on September 1, 1997 will be entitled to receive
Distributions accumulated from and including March 10, 1997. Holders of the
Old Capital Securities whose Old Capital Securities are accepted for exchange
will not receive Distributions on such Old Capital Securities and will be
deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after March 10, 1997. See "The
Exchange Offer--Distributions on New Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. No dealer-manager
is being used in connection with this Exchange Offer. See "Use of Proceeds"
and "Plan of Distribution."
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED
NOT TO BE LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES,
AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
CAPITAL SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"),
NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (I) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (II) IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38,
90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
-------------------
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<PAGE> 9
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
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Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 9
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 9
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 11
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 19
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 25
The Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 25
Selected Consolidated Financial Data of
the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 27
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 29
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 29
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 29
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 30
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 30
Description of New Securities . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 40
Description of Old Securities . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 63
Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 63
Certain Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 65
ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 69
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 70
Validity of New Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 71
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 71
</TABLE>
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<PAGE> 10
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Citicorp
Center, 14th Floor, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material also can be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such information also may be accessed through
the Commission's electronic data gathering, analysis and retrieval system
("EDGAR") via electronic means, including the Commission's web site on the
Internet (http://www.sec.gov). Such reports, proxy statements and other
information concerning the Corporation also can be inspected at the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Capital Securities because the Trust is a
newly-formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Junior Subordinated Debentures and
issuing the Trust Securities. See "The Trust" and "Description of New
Securities." In addition, the Corporation does not expect that the Trust will
file reports, proxy statements and other information under the Exchange Act
with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Corporation and the Trust with the
Commission under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the New Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed by the Corporation with the Commission is
incorporated by reference in this Prospectus:
1. Annual Report on Form 10-K for the year ended March 31, 1997.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior
to the termination of the offering of the New Securities offered hereby shall
be deemed to be incorporated by reference in this Prospectus and to be a part
of this Prospectus from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein (or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
9
<PAGE> 11
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of
any contract or other document referred to herein do not purport to be
complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents). Requests for such documents
should be directed to: ML Bancorp, Inc., Two Aldwyn Center, Lancaster Avenue &
Route 320, Villanova, Pennsylvania 19085, Attention: Shareholder Relations
(telephone (610) 526-6482).
10
<PAGE> 12
SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements, including
the notes thereto, contained elsewhere in this Prospectus.
ML BANCORP, INC.
The Corporation is a Pennsylvania corporation which was organized in March
1994 to acquire all of the capital stock of Main Line Bank (the "Bank") issued
in connection with the Bank's conversion from mutual to stock form in August
1994. The Corporation is headquartered in Villanova, Pennsylvania and its
principal business currently consists of the operations of the Bank. The
Corporation reported net income of $13.8 million, or $1.22 per share, for the
year ended March 31, 1997. At March 31, 1997, the Corporation had consolidated
assets of $1.96 billion and stockholders' equity of $135.7 million.
The Bank is a federally-chartered savings bank which conducts business from
its executive offices located in Villanova, Pennsylvania, 26 full-service
offices located in Bucks, Chester, Delaware and Montgomery Counties,
Pennsylvania and 10 mortgage loan production offices which are located in
Delaware, Florida, New Jersey and Pennsylvania. The Bank is a community
oriented savings bank which has historically offered a wide variety of savings
products to its retail customers while concentrating its lending activities on
real estate loans secured by single-family residential properties, residential
construction and development projects and selected commercial properties. As a
full-service community bank, the Bank also offers consumer loans and small
business commercial loans.
ML CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Secretary of State of
the State of Delaware. The Trust's affairs are conducted by the Issuer
Trustees: The Bank of New York as Property Trustee, The Bank of New York
(Delaware) as Delaware Trustee and three individual Administrative Trustees who
are employees or officers of or affiliated with the Corporation. The Trust
exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Corporation and (iii)
engaging in only those other activities necessary, advisable or incidental
thereto. Accordingly, the Junior Subordinated Debentures will be the sole
assets of the Trust, and payments under the Junior Subordinated Debentures will
be the sole revenue of the Trust. All of the Common Securities are owned by
the Corporation.
THE EXCHANGE OFFER
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The Exchange Offer . . . . . . . . . . . . . . . . Up to $50,000,000 aggregate Liquidation Amount of
New Capital Securities are being offered in exchange
for a like aggregate Liquidation Amount of Old
Capital Securities. Old Capital Securities may be
tendered for exchange in whole or in part in a
Liquidation Amount of $100,000 (100 Capital
Securities) or any integral multiple of $1,000 (one
Capital Security) in excess thereof. The
Corporation and the Trust are making the Exchange
Offer in order to satisfy their obligations under
the Registration Rights Agreement relating to the
Old Capital Securities. For a description of the
procedures for tendering Old Capital Securities, see
"The Exchange Offer--Procedures for Tendering Old
Capital Securities."
Expiration Date . . . . . . . . . . . . . . . . . . 5:00 p.m., New York City time, on August ___, 1997,
unless the Exchange Offer is extended by the
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Corporation or the Trust (in which case the
Expiration Date will be the latest date and time to
which the Exchange Offer is extended). See "The
Exchange Offer--Terms of the Exchange Offer."
Conditions to the Exchange Offer . . . . . . . . . The Exchange Offer is subject to certain conditions,
which may be waived by the Corporation and the Trust
in their sole discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. See "The
Exchange Offer--Conditions to the Exchange Offer."
Offer . . . . . . . . . . . . . . . . . . . . . . . The Corporation and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to time,
(i) to delay the acceptance of the Old Capital
Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions have
not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered
Old Capital Securities or (iv) to waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer--Terms of the Exchange Offer."
Withdrawal Rights . . . . . . . . . . . . . . . . . Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer--Withdrawal Rights."
Procedures for Tendering Old Capital Securities . . Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees also may effect tenders
by book-entry transfer, including an Agent's Message
in lieu of a Letter of Transmittal. Holders of Old
Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See "The
Exchange Offer--Procedures for Tendering Old Capital
Securities." Letters of Transmittal and
certificates representing
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Old Capital Securities should not be sent to the
Corporation or the Trust. Such documents should
only be sent to the Exchange Agent. See "The
Exchange Offer Exchange Agent."
Resales of New Capital Securities . . . . . . . . . The Corporation and the Trust are making the
Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the
Commission as set forth in certain interpretive
letters addressed to third parties in other
transactions. However, neither the Corporation nor
the Trust has sought its own interpretive letter and
there can be no assurance that the staff of the
Division of Corporation Finance of the Commission
would make a similar determination with respect to
the Exchange Offer as it has in such interpretive
letters to third parties. Based on these
interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject
to the two immediately following sentences, the
Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered
for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a
broker-dealer) without further compliance with the
registration and prospectus delivery requirements of
the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of
such holder's business and that such holder is not
participating, and has no arrangement or
understanding with any person to participate, in a
distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an Affiliate
of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of
distributing the New Capital Securities, or any
broker-dealer who purchased the Old Capital
Securities from the Trust to resell pursuant to Rule
144A or any other available exemption under the
Securities Act, (i) will not be able to rely on the
interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (ii) will
not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (iii)
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or other transfer of such
Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own
account as a result of market-making or other
trading activities and exchanges such Old Capital
Securities for New
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Capital Securities, then such broker-dealer must
deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of
such New Capital Securities.
Each holder of Old Capital Securities who wishes to
exchange Old Capital Securities for New Capital
Securities in the Exchange Offer will be required to
represent in the Letter of Transmittal or by
transmission of an Agent's Message that (i) it is
not an "affiliate" of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it
are being acquired in the ordinary course of its
business, (iii) it has no arrangement or
understanding with any person to participate in a
distribution (within the meaning of the Securities
Act) of such New Capital Securities and (iv) if such
holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities
Act) of such New Capital Securities. The Letter of
Transmittal contains the foregoing representations.
Each Participating Broker-Dealer that receives New
Capital Securities for its own account pursuant to
the Exchange Offer will be deemed to have
acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message (as
defined herein) that it acquired the Old Capital
Securities for its own account as the result of
market-making activities or other trading activities
and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of such New Capital
Securities. The Letter of Transmittal states that,
by so acknowledging and by delivering a prospectus,
a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning
of the Securities Act. Based on the position taken
by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters
referred to above, the Corporation and the Trust
believe that Participating Broker-Dealers who
acquired Old Capital Securities for their own
accounts as a result of market-making activities or
other trading activities may fulfill their
prospectus delivery requirements with respect to the
New Capital Securities received upon exchange of
such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from
the original sale of the Old Capital Securities)
with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared
for an exchange offer so long as it contains a
description of the plan of distribution with respect
to the resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a
Participating Broker-Dealer in
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connection with resales of New Capital Securities
received in exchange for Old Capital Securities
where such Old Capital Securities were acquired by
such Participating Broker-Dealer for its own account
as a result of market-making or other trading
activities. Subject to certain provisions set forth
in the Registration Rights Agreement and to the
limitations described below under "The Exchange
Offer--Resales of New Capital Securities," the
Corporation and the Trust have agreed that this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90 days after
the Expiration Date (subject to extension under
certain limited circumstances) or, if earlier, when
all such New Capital Securities have been disposed
of by such Participating Broker-Dealer. See "Plan
of Distribution." Any person, including any
Participating Broker-Dealer, who is an Affiliate of
the Corporation or the Trust may not rely on such
interpretive letters and must comply with the
registration and prospectus delivery requirements of
the Securities Act in connection with any resale
transaction. See "The Exchange Offer--Resales of
New Capital Securities."
Exchange Agent . . . . . . . . . . . . . . . . . . The exchange agent with respect to the Exchange
Offer is The Bank of New York (the "Exchange
Agent"). The addresses, and telephone and facsimile
numbers, of the Exchange Agent are set forth in "The
Exchange Offer--Exchange Agent" and in the Letter of
Transmittal.
Use of Proceeds . . . . . . . . . . . . . . . . . . Neither the Corporation nor the Trust will receive
any cash proceeds from the issuance of the New
Capital Securities offered hereby. See "Use of
Proceeds."
Certain Federal Income Tax Considerations;
ERISA Considerations . . . . . . . . . . . . . . Holders of Old Capital Securities should review the
information set forth under "Certain Federal Income
Tax Considerations" and "ERISA Considerations" prior
to tendering Old Capital Securities in the Exchange
Offer.
</TABLE>
THE NEW CAPITAL SECURITIES
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Securities Offered . . . . . . . . . . . . . . . . Up to $50,000,000 aggregate Liquidation Amount of
the Trust's New Capital Securities which have been
registered under the Securities Act (Liquidation
Amount $1,000 per New Capital Security). The New
Capital Securities will be issued and the Old
Capital Securities were issued under the Trust
Agreement. The New Capital Securities and any Old
Capital Securities which remain outstanding after
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<PAGE> 17
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consummation of the Exchange Offer will vote
together as a single class for purposes of
determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain
rights under the Trust Agreement. See "Description
of New Securities--Description of Capital Securities--
Voting Rights; Amendment of the Trust Agreement."
The terms of the New Capital Securities are
identical in all material respects to the terms of
the Old Capital Securities, except that the New
Capital Securities have been registered under the
Securities Act and therefore will not be subject to
certain restrictions on transfer under federal and
state securities laws and will not provide for any
increase in the Distribution rate thereon. See "The
Exchange Offer--Purpose of the Exchange Offer,"
"Description of New Securities" and "Description of
Old Securities."
Distribution Dates . . . . . . . . . . . . . . . . March 1 and September 1 of each year, commencing
September 1, 1997.
Extension Periods . . . . . . . . . . . . . . . . . Distributions on the Capital Securities will be
deferred for the duration of any Extension Period
elected by the Corporation with respect to the
payment of interest on the Junior Subordinated
Debentures. No Extension Period will exceed 10
consecutive semi-annual periods, end on a date other
than an Interest Payment Date or extend beyond the
Stated Maturity Date. See "Description of New
Securities--Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date"
and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue
Discount."
Ranking . . . . . . . . . . . . . . . . . . . . . . The New Capital Securities rank pari passu, and
payments thereon will be made pro rata, with the Old
Capital Securities and the Common Securities except
as described under "Description of New Securities--
Description of Capital Securities--Subordination
of Common Securities." The New Junior Subordinated
Debentures rank pari passu with the Old Junior
Subordinated Debentures, and all other junior
subordinated debentures issued by the Corporation
(the "Other Debentures") and sold to other trusts
established or to be established by the Corporation,
in each case similar to the Trust (the "Other
Trusts"), and are unsecured and subordinate and
junior in right of payment to all Senior
Indebtedness of the Corporation to the extent and in
the manner set forth in the Indenture. See
"Description of New Securities--Description of
Junior Subordinated Debentures." The New Guarantee
ranks pari passu with the Old Guarantee, and all
other guarantees issued by the
</TABLE>
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<PAGE> 18
<TABLE>
<S> <C>
Corporation with respect to capital securities
issued or to be issued by Other Trusts (the "Other
Guarantees") and constitutes an unsecured obligation
of the Corporation and ranks subordinate and junior
in right of payment to all Senior Indebtedness of
the Corporation to the extent and in the manner set
forth in the Guarantee Agreement. See "Description
of New Securities--Description of Guarantee."
Redemption . . . . . . . . . . . . . . . . . . . . The Trust Securities are subject to mandatory
redemption in a Like Amount, (i) in whole but not in
part, on the Stated Maturity Date upon repayment of
the Junior Subordinated Debentures, (ii) in whole
but not in part, at any time before the Initial
Optional Prepayment Date contemporaneously with the
optional redemption of the Junior Subordinated
Debentures by the Corporation upon the occurrence
and continuation of a Special Event (as defined
herein) and (iii) in whole or in part, at any time
on or after the Initial Optional Prepayment Date
contemporaneously with the optional redemption by
the Corporation of the Junior Subordinated
Debentures, in each case at the applicable
Redemption Price. See "Description of New
Securities--Description of Capital Securities--
Redemption."
Rating . . . . . . . . . . . . . . . . . . . . . . The New Capital Securities are expected to be rated
"BB-" by Duff & Phelps Credit Rating Co. and "BB" by
Thomson BankWatch, Inc., which are the ratings which
such agencies have given to the Old Capital
Securities. A security rating is not a
recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time
by the assigning rating organization.
Transfer . . . . . . . . . . . . . . . . . . . . . The Capital Securities will be issued, and may be
transferred, only in blocks having a Liquidation
Amount of not less than $100,000 (100 Capital
Securities). Any transfer, sale or other
disposition of Capital Securities resulting in a
block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no legal
effect whatsoever.
Absence of Market for the New Capital Securities . The New Capital Securities will be a new issue of
securities for which there currently is no market.
Each of Sandler O'Neill & Partners, L.P. and Janney
Montgomery Scott Inc., the initial purchasers of the
Old Capital Securities (the "Initial Purchasers"),
informed the Corporation and the Trust in connection
with the offering of the Old Capital Securities that
it intends to make a market in the Old Capital
Securities. However, neither Initial Purchaser is
obligated to make a market in the Old Capital
Securities or the New Capital Securities, and any
such
</TABLE>
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<PAGE> 19
<TABLE>
<S> <C>
market making may be discontinued at any time
without notice. Accordingly, there can be no
assurance as to the development or liquidity of any
market for the Capital Securities. The Trust and
the Corporation do not intend to apply for listing
of the Capital Securities on any securities exchange
or for quotation through the National Association of
Securities Dealers Automated Quotation System. See
"Plan of Distribution."
</TABLE>
18
<PAGE> 20
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus, the following factors in connection
with the Exchange Offer and the New Capital Securities offered hereby.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES; LIMITATIONS ON SOURCES OF FUNDS
The obligations of the Corporation under the Guarantee for the benefit of
holders of Capital Securities and under the Junior Subordinated Debentures are
unsecured and rank subordinate and junior in right of payment to all present
and future Senior Indebtedness of the Corporation to the extent and in the
manner set forth in the Indenture and the Guarantee, respectively. No payment
may be made of the principal of, or premium, if any, or interest on the Junior
Subordinated Debentures, or in respect of any redemption, retirement, purchase
or other acquisition of any of the Junior Subordinated Debentures, at any time
when (i) there shall have occurred and be continuing a default, in any payment
in respect of any Senior Indebtedness, or there has been an acceleration of the
maturity thereof because of a default, or (ii) in the event of the acceleration
of the maturity of the Junior Subordinated Debentures until payment has been
made on all Senior Indebtedness. At March 31, 1997, the aggregate principal
amount of outstanding Senior Indebtedness of the Corporation was approximately
$____. Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution) is subject to the prior claims of creditors of that subsidiary,
except to the extent that the Corporation may itself be recognized as a
creditor of such subsidiary. At March 31, 1997, the subsidiaries of the
Corporation had total liabilities (excluding liabilities owed to the
Corporation) of approximately $1.77 billion, including deposits. Accordingly,
the Junior Subordinated Debentures effectively will be subordinated to all
existing and future liabilities of the Corporation's subsidiaries, and holders
of Junior Subordinated Debentures should look only to the assets of the
Corporation for payments on the Junior Subordinated Debentures. The Guarantee
constitutes an unsecured obligation of the Corporation and ranks subordinate
and junior in right of payment to all Senior Indebtedness of the Corporation in
the same manner as the Junior Subordinated Debentures. None of the Indenture,
the Guarantee or the Trust Agreement places any limitation on the amount of
secured or unsecured debt, including Senior Indebtedness, that may be incurred
by the Corporation or any of its subsidiaries. See "Description of New
Securities -- Description of Guarantee -- Status of Guarantee" and "--
Description of Junior Subordinated Debentures -- Subordination."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior
Subordinated Debentures as and when required.
The Corporation is a holding company and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiaries. The Corporation
relies primarily on dividends from the Bank to meet its obligations for payment
of principal and interest on its outstanding debt obligations and corporate
expenses. There are regulatory limitations on the payment of dividends directly
or indirectly to the Corporation from the Bank. As of March 31, 1997, under
regulations of the Office of Thrift Supervision ("OTS"), the total capital
available for payment of dividends by the Bank to the Corporation was
approximately $29.1 million. However, the OTS has the power to prohibit any
act, including the payment of dividends, if such act would reduce the Bank's
capital to a point that, in its opinion, would render the Bank undercapitalized
and thus constitute an unsafe or unsound banking practice. In addition to
restrictions on the payment of dividends, the Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. Further, such secured loans,
other transactions and investments by the
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<PAGE> 21
Bank are generally limited in amount as to the Corporation and as to each of
such other affiliates to 10% of the Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation has the right under the Indenture
to defer payments of interest on the Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension
Period shall end on a date other than an Interest Payment Date or extend beyond
the Stated Maturity Date. As a consequence of any such deferral, semi-annual
Distributions on the Trust Securities by the Trust will be deferred (and the
amount of Distributions to which holders of the Trust Securities are entitled
will accumulate additional Distributions thereon at the rate of 9.875% per
annum, compounded semi-annually, but not exceeding the interest rate then
accruing on the Junior Subordinated Debentures) from the relevant payment date
for such Distributions during any such Extension Period. During the pendency of
any Extension Period, the Corporation generally will be prohibited from
declaring or paying dividends on the Corporation's capital stock. See
"Description of New Securities--Description of Capital Securities--
Distributions."
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any Extension Period and the payment of
all interest then accrued and unpaid on the Junior Subordinated Debentures
(together with interest thereon at the annual rate of 9.875%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above requirements. There
is no limitation on the number of times that the Corporation may elect to begin
an Extension Period. See "Description of New Securities--Description of
Capital Securities--Distributions" and "--Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date."
The Corporation has no current plan to exercise its right to defer payments
of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Trust Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Trust Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Trust Securities. As a result, each holder of Capital Securities will recognize
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash related to such income from the Trust if
the holder disposes of the Capital Securities prior to the record date for the
payment of Distributions thereafter. See "Certain Federal Income Tax
Considerations--Interest Income and Original Issue Discount" and "--Sales of
Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Capital Securities. In addition, the mere existence of the Corporation's right
to defer payments of interest on the Junior Subordinated Debentures may cause
the market price of the Capital Securities to be more volatile than the market
prices of other securities on which OID accrues and that are not subject to
such deferrals.
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<PAGE> 22
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (including a Tax
Event or a Regulatory Capital Event (in each case as defined under "Description
of New Securities--Description of Junior Subordinated Debentures--Special
Event Prepayment")) prior to the Initial Optional Prepayment Date, the
Corporation will have the right to prepay the Junior Subordinated Debentures in
whole (but not in part) at the Special Event Prepayment Price within 90 days
following the occurrence of such Special Event and therefore cause a mandatory
redemption of the Trust Securities at the Special Event Redemption Price. The
exercise of such right is subject to the Corporation having received any
required regulatory approval. See "Description of New Securities--Description
of Capital Securities--Redemption."
PROPOSED TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States federal
income tax purposes for the payment of interest in respect of certain types of
debt obligations (the "Administration's Proposal"). The Administration's
Proposal would apply to debt obligations, such as the Junior Subordinated
Debentures, issued on or after the date of "first committee action" with
respect to the Administration's Proposal if such debt obligations have a
maximum term in excess of 15 years and are not shown as indebtedness on the
issuer's balance sheet or if such debt obligations have a maximum weighted
average maturity of more than 40 years. Under current law, the Corporation
will be able to deduct interest on the Junior Subordinated Debentures, and as
proposed the Administration's Proposal would not apply to the Junior
Subordinated Debentures because they were issued prior to the date of "first
committee action." Legislative proposals approved by the U.S. House of
Representatives and the U.S. Senate on June 26 and 27, 1997, respectively, did
not include the Administration's Proposal, and on June 30, 1997, the Clinton
Administration announced a new budget proposal which also does not appear to
include such proposal. There can be no assurance, however, that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the
Junior Subordinated Debentures for cash, in which event the holders of Capital
Securities would receive cash in redemption of their Capital Securities. See
"Description of New Securities--Description of Capital Securities--Redemption"
and "Description of Junior Subordinated Debentures--Special Event Prepayment."
See also "Certain Federal Income Tax Considerations--Proposed Tax
Legislation."
LIQUIDATION DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Corporation has the right at any time to terminate the Trust and, after
satisfaction of liabilities to creditors of the Trust as required by applicable
law, to cause the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to the holders of
Capital Securities and (ii) receipt of any required regulatory approval. Under
current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a
taxable event to holders of the Capital Securities. Upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations--Receipt of Junior Subordinated Debentures
or Cash Upon Liquidation of the Trust."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities or
the Junior Subordinated Debentures that may be distributed in exchange for
Capital Securities if a termination of the Trust were to occur.
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<PAGE> 23
Accordingly, the Capital Securities or the Junior Subordinated Debentures may
trade at a discount from the price that the investor paid to purchase the
Capital Securities offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures in liquidation of the Trust and because
Distributions are otherwise limited to payments on the Junior Subordinated
Debentures, prospective purchasers of Capital Securities are also making an
investment decision with regard to the Junior Subordinated Debentures and
should carefully review all the information regarding the Junior Subordinated
Debentures contained herein. See "Description of New Securities--Description
of Junior Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Trust: (i)
any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to the
Capital Securities called for redemption, to the extent that the Trust has
funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Capital Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment, to the
extent that the Trust has funds on hand legally available therefor at such
time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities at such time, after the
satisfaction of liabilities to creditors of the Trust as provided by applicable
law.
The holders of a majority in Liquidation Amount of the Capital Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
will not be able to rely upon the Guarantee for payment of such amounts.
Instead, in the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay the principal of (or premium, if any) or interest (including Additional
Sums (as defined below) and Compounded Interest (as defined below), if any) or
Liquidated Damages, if any, on the Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Capital
Securities may institute a legal proceeding directly against the Corporation
for enforcement of payment to such holder of the principal of (or premium, if
any) or interest (including Additional Sums and Compounded Interest, if any) or
Liquidated Damages, if any, on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Capital Securities by the Corporation in connection with a Direct Action,
the Corporation shall remain obligated to pay the principal of (and premium, if
any) and interest (including Additional Sums and Compounded Interest, if any)
or Liquidated Damages, if any, on the Junior Subordinated Debentures, and the
Corporation shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Corporation to such holder in any Direct Action.
Except as described herein, holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures or to assert directly any other rights in respect of
the Junior Subordinated Debentures. See "Description of New Securities--
Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Capital Securities," "--Debenture Events of Default" and
"--Description of Guarantee." The Trust Agreement provides that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture. The Bank of New York acts as Guarantee Trustee and holds the
Guarantee for the benefit of
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<PAGE> 24
the holders of the Capital Securities. The Bank of New York also acts as
Property Trustee and as Debenture Trustee under the Indenture. The Bank of New
York (Delaware) acts as Delaware Trustee under the Trust Agreement.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have limited voting rights
relating only to the modification of the Capital Securities and the exercise of
the Trust's rights as holder of Junior Subordinated Debentures. Holders of
Capital Securities will not be entitled to vote to appoint, remove or replace,
or to increase or decrease the number of, the Issuer Trustees, which voting
rights are vested exclusively in the holder of the Common Securities except
upon the occurrence of certain events described herein. The Property Trustee,
the Administrative Trustees and the Corporation may amend the Trust Agreement
without the consent of holders of Capital Securities to ensure that the Trust
will be classified for United States federal income tax purposes as a grantor
trust even if such action adversely affects the interests of such holders.
Holders of Capital Securities will have no voting rights with respect to any
matters submitted to a vote of the Corporation's stockholders. See "Description
of New Securities--Description of Capital Securities--Voting Rights;
Amendment of the Trust Agreement" and "--Removal of Issuer Trustees."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements
of the Securities Act and any other applicable securities laws, or pursuant to
an exemption therefrom or in a transaction not subject thereto, and in each
case in compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement. The Corporation and
the Trust do not intend to register under the Securities Act any Old Capital
Securities which remain outstanding after consummation of the Exchange Offer.
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automated Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.
The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement. See "Description of New
Securities--Description of Capital Securities--Voting Rights; Amendment of the
Trust Agreement."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
August 7, 1997 and declared effective by September 6, 1997, the Distribution
rate borne by the Old Capital Securities commencing on March 10, 1997 will
increase by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Old Capital Securities will not
be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement. The New Capital
Securities will not be entitled to any such increase in the Distribution rate
thereon. See "Description of Old Capital Securities."
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TRADING CHARACTERISTICS OF THE CAPITAL SECURITIES
The Capital Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debentures. A holder who uses the accrual method of accounting
for tax purposes (and a cash method holder, if the Junior Subordinated
Debentures are deemed to have been issued with OID) and who disposes of its
Capital Securities between record dates for payments of distributions thereon
will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to its
adjusted tax basis in its share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See "Certain Federal Income Tax
Considerations -- Interest Income and Original Issue Discount" and "-- Sales of
Capital Securities."
ABSENCE OF PUBLIC MARKET
The Old Capital Securities have not been registered under the Securities
Act and will continue to be subject to restrictions on transferability under
the Securities Act and applicable state securities laws if they are not
exchanged for New Capital Securities. Although the New Capital Securities
generally may be resold or otherwise transferred by the holders (who are not
Affiliates of the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market. Capital Securities may
be transferred by the holders thereof only in blocks having a Liquidation
Amount of not less than $100,000 (100 Capital Securities). The Corporation and
the Trust were advised by the Initial Purchasers in connection with the
offering of the Old Capital Securities that the Initial Purchasers intend to
make a market in the Old Capital Securities. However, neither Initial
Purchaser is obligated to do so and any market-making activity with respect to
the New Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the New Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the New Capital
Securities or the Old Capital Securities. If an active public market does not
develop, the market price and liquidity of the New Capital Securities may be
adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, the Corporation's results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Corporation, the New Capital Securities may trade at a
discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are Affiliates of the Corporation or the Trust may
publicly offer for sale or resell the New Capital Securities only in compliance
with the provisions of Rule 144 under the Securities Act.
Each Participating Broker-Dealer that receives New Capital Securities for
its own account in exchange for Old Capital Securities must acknowledge that it
will deliver a prospectus in connection with any resale of such New Capital
Securities. See "Plan of Distribution."
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<PAGE> 26
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal or Agent's Message in lieu thereof and all
other required documents. Therefore, holders of the Old Capital Securities
desiring to tender such Old Capital Securities in exchange for New Capital
Securities should allow sufficient time to ensure timely delivery. None of the
Corporation, the Trust or the Exchange Agent is under any duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.
THE TRUST
The Trust is a statutory business trust created under Delaware law upon the
filing of a certificate of trust with the Secretary of State of the State of
Delaware. The Trust exists for the exclusive purposes of (i) issuing and
selling the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust, (ii) investing the gross proceeds from the sale of the
Trust Securities in the Junior Subordinated Debentures and (iii) engaging in
only those other activities necessary, advisable or incidental thereto.
Accordingly, the Junior Subordinated Debentures will be the sole assets of the
Trust and payments under the Junior Subordinated Debentures will be the sole
revenues of the Trust. All of the Common Securities are owned directly by the
Corporation. The Common Securities rank pari passu, and payments will be made
thereon pro rata, with the Capital Securities, except that upon the occurrence
and during the continuance of an Event of Default, the rights of the
Corporation as holder of the Common Securities to payments in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated and rank junior to the rights of the holders of the Capital
Securities. See "Description of New Securities--Description of Capital
Securities -- Subordination of Common Securities." The Corporation acquired
Common Securities in a Liquidation Amount equal to 3% of the total capital of
the Trust. The Trust has a term of 31 years, but may terminate earlier as
provided in the Trust Agreement. The Trust's business and affairs are
conducted by trustees (the "Issuer Trustees") appointed by the Corporation as
the direct holder of the Common Securities. The Issuer Trustees are The Bank
of New York as the Property Trustee (the "Property Trustee"), The Bank of New
York (Delaware) as the Delaware Trustee (the "Delaware Trustee") and three
individual trustees (the "Administrative Trustees"). The Bank of New York, as
Property Trustee, acts as sole indenture trustee under the Trust Agreement.
The Bank of New York also acts as indenture trustee under the Guarantee and the
Indenture. See "Description of New Securities Description of Guarantee" and
"--Description of Junior Subordinated Debentures." The holder of the Common
Securities or, if an Event of Default under the Trust Agreement has occurred
and is continuing, the holders of not less than a majority in Liquidation
Amount of the Capital Securities, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee. In no event will the
holders of the Capital Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights will be vested
exclusively in the holder of the Common Securities. The duties and obligations
of each Issuer Trustee are governed by the Trust Agreement. The Corporation
will pay directly all fees, expenses, debts and obligations (other than the
Trust Securities) related to the Exchange Offer, except as provided herein, and
will pay, directly or indirectly, all ongoing costs, expenses and liabilities
of the Trust. The principal executives office of the Trust is c/o ML Bancorp,
Inc., Two Aldwyn Center, Lancaster Avenue & Route 320, Villanova, Pennsylvania
19085.
THE CORPORATION
The Corporation is a Pennsylvania corporation organized in March 1994 to
acquire all of the capital stock of the Bank issued in connection with the
Bank's conversion from mutual to stock form in August 1994. The Corporation is
headquartered in Villanova, Pennsylvania and its principal business currently
consists of the
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operations of the Bank. The Corporation reported net income of $13.8 million,
or $1.22 per share, for the year ended March 31, 1997. At March 31, 1997, the
Corporation had consolidated assets of $1.96 billion and stockholders' equity
of $135.7 million.
The Bank is a federally-chartered savings bank which conducts business from
its executive offices located in Villanova, Pennsylvania, 26 full-service
offices located in Bucks, Chester, Delaware and Montgomery Counties,
Pennsylvania and 10 mortgage loan production offices which are located in
Delaware, Florida, New Jersey and Pennsylvania. The Bank is a community
oriented savings bank which has historically offered a wide variety of savings
products to its retail customers while concentrating its lending activities on
real estate loans secured by single-family residential properties, residential
construction and development projects and selected commercial properties. As a
full-service community bank, the Bank also offers consumer loans and small
business commercial loans. In recent years, the Bank has expanded in part
through de novo branching. The Bank opened four new full-service branch offices
in the fiscal year ended March 31, 1996 and six new offices in fiscal 1997. The
Bank also intends to open four new full-service branch offices during fiscal
1998.
Acquisitions have been, and are expected to continue to be, an important
part of the expansion of the Corporation's business. During the year ended
March 31, 1996, the Corporation completed the acquisition of Hart Mortgage Co.,
a mortgage banking company, and Suburban Federal Savings Bank, a community bank
headquartered in Delaware County, Pennsylvania with $66.0 million in assets. On
April 1, 1996, the Corporation acquired Philadelphia Mortgage Corporation, a
mortgage banking company with a $1.3 billion loan servicing portfolio. On
February 4, 1997, the Corporation entered into a definitive agreement to
acquire Penncore Financial Services Corporation ("Penncore"), the holding
company for Commonwealth State Bank, a Pennsylvania-chartered bank which
conducts business from two offices located in Newtown and Yardley,
Pennsylvania, both of which are located in Bucks County, Pennsylvania. In
connection with the acquisition of Penncore, the Corporation will pay total
consideration of $14.1 million to Penncore stockholders in a combination of
cash and common stock of the Corporation. The acquisition of Penncore will be
accounted for as a purchase and is subject to the receipt of required
stockholder and regulatory approvals and other customary conditions. It is
anticipated that the acquisition will be consummated during the third quarter
of calendar 1997. At December 31, 1996, Penncore had consolidated assets of
$137.8 million and stockholders' equity of $9.6 million.
The Corporation is a registered savings and loan holding company subject to
certain regulation and examination by the OTS and the Bank is subject to
regulation and examination by the OTS, as its chartering authority, and by the
Federal Deposit Insurance Corporation ("FDIC"), which insures its deposits to
the maximum extent permitted by law through the Savings Association Insurance
Fund ("SAIF") administered by it.
The principal executive offices of the Company are located at Two Aldwyn
Center, Lancaster Avenue & Route 320, Villanova, Pennsylvania 19085 and its
telephone number is (610) 526-6482.
26
<PAGE> 28
SELECTED CONSOLIDATED FINANCIAL DATA OF THE CORPORATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The selected consolidated financial data below should be read in connection
with the financial information included in the Corporation's Annual Report on
Form 10-K for the year ended March 31, 1997.
<TABLE>
<CAPTION>
March 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Total assets . . . . . . . . $1,959,847 $1,765,812 $1,563,452 $1,001,037 $989,308
Loans receivable, net . . . 730,535 691,791 550,013 268,335 290,380
Investments and
mortgage-related
securities, net . . . . 417,364 429,092 515,383 428,103 418,064
Assets available for sale . 702,533 564,354 436,332 264,724 230,660
Deposit accounts . . . . . . 873,357 861,016 688,678 679,525 618,693
Borrowings . . . . . . . . . 893,703 778,225 710,541 256,795 304,881
Equity . . . . . . . . . . . 135,704 140,337 141,300 53,978 57,056
Nonperforming assets . . . . 10,724 10,445 8,931 12,360 24,658
Allowance for loan losses . 14,733 13,124 9,111 7,337 7,488
Book value per share(2) . . 13.03 12.24 11.15 N/A N/A
Tangible book value per
share(2) . . . . . . . . . . 12.77 11.93 11.10 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
-------- --------- -------- ------- --------
Operations Data:
<S> <C> <C> <C> <C> <C>
Interest income . . . . . . $137,318 $120,421 $90,233 $61,889 $70,973
Interest expense . . . . . . 83,139 76,659 53,484 39,079 45,959
------- ------- ------ ------ ------
Net interest income . . . . 54,179 43,762 36,749 22,820 25,014
Provision for loan losses . 5,310 4,000 3,400 1,113 3,169
------- ------- ------- ------- -------
Net interest income after
provision
for loan losses . . . . . 48,869 39,762 33,349 21,707 21,845
Non-interest income . . . . 15,706 7,269 3,412 8,616 7,196
Non-interest expenses(1) . . 48,860 29,139 23,093 21,000 20,253
------ ------ ------ ------ ------
Income before income taxes . 15,715 17,892 13,668 9,323 8,788
Income taxes . . . . . . . . 1,905 6,272 4,974 7,461 3,267
Cumulative effect of change
in accounting for income
taxes . . . . . . . . . -- -- -- -- 1,967
------ ------ ----- ----- -----
Net income . . . . . . . . . $13,810 $11,620 $8,694 $1,862 $7,488
====== ====== ===== ===== =====
Per Share Data:
Earnings per share fully
diluted(2) . . . . . . . . . $1.22 $0.91 0.46 N/A N/A
Dividends per share(2) . . . 0.38 0.26 N/A N/A N/A
</TABLE>
(Continued on next page)
27
<PAGE> 29
<TABLE>
<CAPTION>
At or For the Year Ended March 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ----- -----
Selected Financial Ratios(3):
<S> <C> <C> <C> <C> <C>
Return on average assets . . 0.74% 0.71% 0.66% 0.19% 0.79%
Return on average equity . . 9.73 7.88 8.22 3.17 14.81
Net interest margin . . . . . 3.06 2.79 2.90 2.39 2.74
Operating expenses as a
percent of
average assets . . . . . . 2.60 1.79 1.76 2.10 2.14
Nonperforming assets as a
percent of
total assets at end of
period . . . . . . . . . 0.55 0.59 0.57 1.23 2.49
Allowance for loan losses as
a percent of nonperforming
loan at
end of period . . . . . . . 156.86 156.20 134.74 137.50 55.16
Dividend payout ratio . . . . 29.80 27.49 N/A N/A N/A
Regulatory capital ratios of
the Bank
at end of period:
Core . . . . . . . . . . . 5.93 7.48 9.17 5.11 5.31
Tangible . . . . . . . . . 5.93 7.48 9.17 5.15 5.40
Risk-based . . . . . . . . 13.95 15.31 21.54 12.67 13.11
</TABLE>
- ----------------------------
(1) Results of operations for 1997 were impacted by $3.8 million of tax
benefit related to legislation which eliminated the need to recapture tax bad
debt reserves, which was substantially offset by a one-time, pre-tax charge of
$4.8 million ($3.1 million net tax) incurred in connection with the
recapitalization of the SAIF pursuant to the same legislation. The net effect
of these items was to increase net income during 1997 by $0.06 per share.
(2) Per share data is calculated since August 11, 1994, the date of the
Corporation's initial public offering, and has been adjusted for the
Corporation's two-for-one stock split effected on September 6, 1996.
(3) With the exception of end-of-period ratios, all ratios are based on
average daily balances during the indicated periods.
28
<PAGE> 30
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. The Old
Capital Securities surrendered in exchange for the New Capital Securities will
be retired and cancelled.
The proceeds to the Trust from the offering of the Old Capital
Securities was $50,000,000 (before giving effect to approximately $1,625,000 of
expenses of the offering payable by the Corporation). All of the proceeds from
the sale of Old Capital Securities were invested by the Trust in the Junior
Subordinated Debentures. The net proceeds were added by the Corporation to its
general corporate funds and will be available for general corporate purposes,
including contributions to the Bank to fund its operations (including its de
novo branching strategy), the funding of a portion of the consideration to be
paid in connection with the pending acquisition of Penncore, as described under
"The Corporation," the financing of one or more future acquisitions and the
funding of repurchases of the Corporation's common stock which may be made from
time to time. From time to time, the Corporation investigates and holds
discussions and negotiations in connection with possible transactions with
other financial institutions and holding companies thereof. As of the date of
this Prospectus, the Corporation has not entered into any agreements or
understandings with respect to any such acquisitions or any other material
transactions of the type referred to above, other than the agreement with
Penncore described above. Initially, the net proceeds may be used to make
short-term investments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
of the Corporation on a consolidated basis for the periods indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ---------- --------- --------- ---------
Ratios of Earnings to Fixed Charges:
<S> <C> <C> <C> <C> <C>
Including interest on deposits . . . 1.19x 1.23x 1.26x 1.24x 1.19x
Excluding interest on deposits . . . 1.80x 2.11x 2.41x 3.13x 3.18x
</TABLE>
For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items and cumulative
effect of changes in accounting principles plus applicable income taxes and
fixed charges. Fixed charges, excluding interest on deposits, include gross
interest expense (other than on deposits) and the portion deemed representative
of the interest factor of rent expense, net of income from subleases. Fixed
charges, including gross interest on deposits, include all interest expense and
the portion deemed representative of the interest factor of rent expense, net
of income from subleases.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as a subsidiary
of the Corporation and, accordingly, the accounts of the Trust are included in
the consolidated financial statements of the Corporation. The Capital
Securities are presented as a separate line item in the consolidated balance
sheets of the Corporation, entitled "Corporation-obligated, mandatorily
redeemable securities of subsidiary trust holding solely junior subordinated
debentures of the Corporation," and appropriate disclosures about the Capital
Securities, the Guarantee and the Junior Subordinated Debentures are included
in the notes to the consolidated financial statements for financial reporting
purposes. For financial reporting purposes, the Corporation records
Distributions payable on the Capital Securities as a non-interest expense in
the consolidated statements of income.
29
<PAGE> 31
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of March 31, 1997, which reflects the consummation of the
offering of the Capital Securities. The following data should be read in
conjunction with the financial information included in documents incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
March 31, 1997
--------------------
(Dollars in Thousands)
<S> <C>
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $873,357
Advances from Federal Home Loan Bank . . . . . . . . . . . . . . . 437,418
Securities sold under agreements to repurchase . . . . . . . . . . 456,285
Advance payments to borrowers for taxes and insurance . . . . . . . 3,670
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 3,413
---------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,774,143
---------
Corporation-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely junior subordinated debentures
of the Corporation(1) . . . . . . . . . . . . . . . . . . . . . 50,000
---------
Stockholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized, none
issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
Common stock, par value $0.01 per share, 30,000,000 shares
authorized, 14,547,600 shares issued . . . . . . . . . . . . . . 73
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . 97,237
Common stock acquired by stock benefit plans . . . . . . . . . . . (7,336)
Net unrealized loss on securities available for sale . . . . . . . (403)
Treasury stock, at cost, 3,271,046 shares . . . . . . . . . . . . . (37,147)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 83,280
Total stockholders' equity . . . . . . . . . . . . . . . . . . . 135,704
----------
Total liabilities, minority interest in subsidiaries and
stockholders' equity . . . . . . . . . . . . . . . . . . . . . $1,959,847
=========
</TABLE>
- ----------------------------
(1) Reflects the Capital Securities at their issue price. As described herein,
the sole assets of the Trust, which is a subsidiary of the Corporation, are the
$51,546,000 aggregate principal amount of the Junior Subordinated Debentures
(including the amounts attributable to the issuance of the Common Securities of
the Trust), which will mature on March 1, 2027. The Corporation owns all of the
Common Securities issued by the Trust.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchasers, pursuant to which the Corporation and the Trust agreed
to file and to use their reasonable best efforts to cause to be declared
effective by the Commission a
30
<PAGE> 32
registration statement with respect to the exchange of the Old Capital
Securities for capital securities with terms identical in all material respects
to the terms of the Old Capital Securities. A copy of the Registration Rights
Agreement has been filed as an Exhibit to the Registration Statement of which
this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Corporation and the Trust under the Registration Rights
Agreement. The form and terms of the New Capital Securities are the same as
the form and terms of the Old Capital Securities except that the New Capital
Securities (i) have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer under federal and state
securities laws and (ii) will not provide for any increase in the Distribution
rate thereon. In that regard, the Old Capital Securities provide, among other
things, that, if a registration statement relating to the Exchange Offer has
not been filed by August 7, 1997 and declared effective by September 6, 1997,
the Distribution rate borne by the Old Capital Securities, commencing on March
10, 1997 will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities" and "Description of Old Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
the DTC system whose name appears on a security position listing as the holder
of such Old Capital Securities and who desires to deliver such Old Capital
Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon
as practicable after the date hereof, the Old Guarantee for the New Guarantee
and the Old Junior Subordinated Debentures, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures. The New Guarantee and the
New Junior Subordinated Debentures have been registered under the Securities
Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $50,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$50,000,000 of New Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof, provided that if
any Old Capital Securities are tendered in exchange for part, the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $50,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.
31
<PAGE> 33
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange
Offer. See "--Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY TRUSTEE OF
THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS
BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION, DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
August ___, 1997 unless the Exchange Offer is extended by the Corporation or
the Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right in their
sole and absolute discretion, subject to applicable law, at any time and from
time to time, (i) to delay the acceptance of the Old Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) if the Corporation and
the Trust determine, in their sole and absolute discretion, that any of the
events or conditions referred to under "--Conditions to the Exchange Offer"
have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Old Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their tendered Old Capital
Securities as described under "--Withdrawal Rights," and (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in any respect.
If the Exchange Offer is amended in a manner determined by the Corporation and
the Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the Trust
will promptly disclose such amendment by means of a Prospectus supplement that
will be distributed to the registered holders of the Old Capital Securities,
and the Corporation and the Trust will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent
and by making a public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 a.m., New York City time, on
the next
32
<PAGE> 34
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer,
the Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal and that the Trust
and the Corporation may enforce such Letter of Transmittal against such
participant.
Subject to the terms and conditions of the Exchange Offer, the
Corporation and the Trust will be deemed to have accepted for exchange, and
thereby exchanged, Old Capital Securities validly tendered and not withdrawn
as, if and when the Trust gives oral or written notice to the Exchange Agent of
the Corporation's and the Trust's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Trust for the purpose of receiving tenders of Old Capital Securities,
Letters of Transmittal and related documents, and as agent for tendering
holders for the purpose of receiving Old Capital Securities, Letters of
Transmittal and related documents and transmitting New Capital Securities to
validly tendering holders. Such exchange will be made promptly after the
Expiration Date. If, for any reason whatsoever, acceptance for exchange or the
exchange of any Old Capital Securities tendered pursuant to the Exchange Offer
is delayed (whether before or after the Trust's acceptance for exchange of Old
Capital Securities) or the Corporation and the Trust extend the Exchange Offer
or are unable to accept for exchange or exchange Old Capital Securities
tendered pursuant to the Exchange Offer, then, without prejudice to the
Corporation's and the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Corporation and the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and
such Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "--Withdrawal
Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu
thereof, a holder of Old Capital Securities will warrant and agree in the
Letter of Transmittal that it has full power and authority to tender, exchange,
sell, assign and transfer Old Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Old Capital Securities,
free and clear of all liens, restrictions, charges and encumbrances, and the
Old Capital Securities tendered for exchange are not subject to any adverse
claims or proxies. The holder also will warrant and agree that it will, upon
request, execute and deliver any additional documents deemed by the
Corporation, the Trust or the Exchange Agent to be necessary or desirable to
33
<PAGE> 35
complete the exchange, sale, assignment and transfer of the Old Capital
Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
VALID TENDER. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry transfer) an
Agent's Message in lieu of a Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "--Exchange Agent," and (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below and
a book-entry confirmation, including an Agent's Message if the tendering holder
has not delivered a Letter of Transmittal, must be received by the Exchange
Agent, in each case on or prior to the Expiration Date, or (iii) the guaranteed
delivery procedures set forth below must be complied with.
If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal and the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof. The entire amount of Old Capital Securities delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN-RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account
with respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities by
causing DTC to transfer such Old Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfers. However,
although delivery of Old Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in lieu of the Letter of
Transmittal, and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "--Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
SIGNATURE GUARANTEES. Certificates for the Old Capital Securities
need not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such holder completes the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" in the Letter of Transmittal. In the case
of (i) or (ii) above, such certificates for Old Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
34
<PAGE> 36
"eligible guarantor institution," including (as such terms are defined
therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a Securities
Transfer Association (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. See Instruction 1 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Old Capital Securities may nevertheless be tendered, provided that
all of the following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal, is
received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing
all tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, with any required signature
guarantees and any other documents required by the Letter of Transmittal, are
received by the Exchange Agent within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only
after timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of New Capital Securities might not be
made to all tendering holders at the same time, and will depend upon when Old
Capital Securities, book-entry confirmations with respect to Old Capital
Securities and other required documents are received by the Exchange Agent.
The Corporation's and the Trust's acceptance for exchange of Old
Capital Securities tendered pursuant to any of the procedures described above
will constitute a binding agreement between the tendering holder, the
Corporation and the Trust upon the terms and subject to the conditions of the
Exchange Offer.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange Offer
as set forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital
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Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. None of the
Corporation, the Trust, any affiliates or assigns of the Corporation or the
Trust, the Exchange Agent or any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of
attorney or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Trust is making the Exchange Offer for the New Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an Affiliate of the Corporation or the Trust or who intends
to participate in the Exchange Offer for the purpose of distributing New
Capital Securities, or any broker-dealer who purchased Old Capital Securities
from the Trust to resell pursuant to Rule 144A or any other available exemption
under the Securities Act (i) will not be able to rely on the interpretations of
the staff of the Division of Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (ii) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer and (iii)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old
Capital Securities, unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, Participating Broker-Dealers
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Corporation or the
Trust, (ii) any New Capital Securities to be received by it are being acquired
in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities and (iv) if such
holder is not a broker-dealer,
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such holder is not engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such New Capital Securities. The
Letter of Transmittal contains the foregoing representations. In addition, the
Corporation and the Trust may require such holder, as a condition to such
holder's eligibility to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing information as to
the number of "beneficial owners" (within the meaning of Rule 13d-3 under the
Exchange Act) on behalf of whom such holder holds the Capital Securities to be
exchanged in the Exchange Offer. Each Participating Broker-Dealer will be
deemed to have acknowledged by execution of the Letter of Transmittal or
delivery of an Agent's Message that it acquired the Old Capital Securities for
its own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a Participating Broker-Dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Corporation and the Trust believe that Participating Broker-Dealers
who acquired Old Capital Securities for their own accounts as a result of
market-making activities or other trading activities may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the
Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, this Prospectus, as it
may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of New Capital Securities received in exchange for Old Capital
Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90-days after the Expiration Date
(subject to extension under certain limited circumstances described below) or,
if earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "--Exchange Agent." Any person, including any Participating
Broker-Dealer, who is an Affiliate of the Corporation or the Trust may not rely
on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal or delivery of an Agent's
Message in lieu thereof, that, upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed,
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as the case may be. If the Corporation or the Trust gives such notice to
suspend the sale of the New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debentures, as applicable), it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use this Prospectus in connection with the resale of New Capital Securities
by the number of days during the period from and including the date of the
giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the New Capital Securities or to and
including the date on which the Corporation or the Trust has given notice that
the sale of New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "--Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Old Capital Securities, the tendering holder must submit the certificate
numbers shown on the particular Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in
"--Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "--Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. None of the Corporation, the Trust, any affiliates or
assigns of the Corporation or the Trust, the Exchange Agent or any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive Distributions on such Old Capital
Securities and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and after March
10, 1997. Accordingly, holders of New Capital Securities as of the record date
for the payment of Distributions on September 1, 1997 will be entitled to
receive Distributions accumulated from and after March 10, 1997.
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CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if
any of the following conditions have occurred or exists or have not been
satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof (other
than broker-dealers and any such holder which is an Affiliate of the
Corporation or the Trust) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Capital Securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any person
to participate in the distribution of such New Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer;
(c) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in the Corporation's and the Trust's judgment, would
reasonably be expected to impair the ability of the Trust or the Corporation to
proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or Pennsylvania or New York state authorities which, in the
Corporation's and the Trust's judgment, would reasonably be expected to impair
the ability of the Trust or the Corporation to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's and
the Trust's judgment, would reasonably be expected to impair the ability of the
Issuer or the Corporation to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration Statement
or proceedings shall have been initiated or, to the knowledge of the
Corporation or the Trust, threatened for that purpose, or any governmental
approval which either the Corporation or the Trust shall, in its sole
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby has not been obtained.
If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, the Corporation and the Trust may, subject to
applicable law, terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) or may waive any such
condition or otherwise amend the terms of the Exchange Offer in any respect.
If such waiver or amendment constitutes a material change to the Exchange
Offer, the Corporation and the Trust will promptly disclose such waiver or
amendment by means of a Prospectus supplement that will be distributed to the
registered holders of the Old Capital Securities and will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange Act.
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EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT DELIVERY:
- ------------------------------- -----------------------------
The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Section Ground Level
Odell Romeo New York, New York 10286
Attention: Reorganization Section
Odell Romeo
Confirm by Telephone
or for Information call:
(212) 815-6337
Facsimile Transmission:
(Eligible Institutions Only)
(212) 815-6339
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and
in handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
New Capital Securities are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
Neither the Corporation nor the Trust will make any payment to
brokers, dealers or other nominees soliciting acceptances of the Exchange
Offer.
DESCRIPTION OF NEW SECURITIES
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust has issued the
Old Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent
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undivided beneficial interests in the Trust and the holders of the New Capital
Securities and the Old Capital Securities will be entitled to a preference over
the Common Securities in certain circumstances with respect to Distributions
and amounts payable on redemption of the Trust Securities or liquidation of the
Trust. See "--Subordination of Common Securities." The Trust Agreement has
been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). This summary of certain provisions of the Capital Securities,
the Common Securities and the Trust Agreement describes the material terms of
the Capital Securities but does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
Trust Agreement, including the definitions therein of certain terms.
GENERAL. The Capital Securities (including the Old Capital Securities
and the New Capital Securities) are limited to $50,000,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities rank
pari passu, and payments thereon will be made pro rata, with the Common
Securities except as described under "--Subordination of Common Securities."
Legal title to the Junior Subordinated Debentures is held by the Property
Trustee in trust for the benefit of the holders of the Capital Securities and
the holder of the Common Securities. The Guarantee is a guarantee on a
subordinated and junior basis with respect to the Capital Securities, but does
not guarantee payment of Distributions or amounts payable on redemption of the
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of
Guarantee."
DISTRIBUTIONS. Distributions on the Capital Securities are cumulative
from March 10, 1997, the date of original issuance of the Old Capital
Securities, and are payable semi-annually in arrears on March 1 and September 1
of each year, commencing September 1, 1997, at the annual rate of 9.875% of the
Liquidation Amount to the holders of the Capital Securities on the relevant
record dates. The record dates are the fifteenth day of the month which
proceeds the month in which the relevant Distribution Date (as defined below)
falls. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than one calendar month, the number of days elapsed in such month. In the
event that any date on which Distributions are payable on the Capital
Securities is not a Business Day (as defined below), payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect to any
such delay), with the same force and effect as if made on the date such payment
was originally payable (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in New York, New York or Villanova, Pennsylvania are authorized or
required by law or executive order to remain closed.
So long as no "Event of Default" (as defined in the Indenture) with
respect to the Junior Subordinated Debentures (a"Debenture Event of Default")
shall have occurred and be continuing, the Corporation has the right under the
Indenture to elect to defer the payment of interest on the Junior Subordinated
Debentures at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity Date. Upon any
such election, semi-annual Distributions on the Capital Securities will be
deferred by the Trust during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled during any such Extension Period
will accumulate additional Distributions thereon at the rate per annum of
9.875% thereof, compounded semi-annually from the relevant Distribution Date.
The term "Distributions," as used herein, shall include any such additional
Distributions.
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, to
end on a date other than an Interest Payment Date or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and
the payment of all amounts then due on any Interest Payment Date, the
Corporation may elect to begin a new Extension Period, subject to the above
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requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of any
such Extension Period (or an extension thereof) at least five Business Days
prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable except for the election to begin such
Extension Period and (ii) the date the Administrative Trustees are required to
give notice to any securities exchange or automated quotation system or to
holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See "--Description of
Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal of or premium, if any, or interest on or
repay, repurchase or redeem any debt securities of the Corporation (including
Other Debentures) that rank pari passu with or junior in right of payment to
the Junior Subordinated Debentures, or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for
another class or series of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans). The Corporation has no current intention to exercise its
option to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period on the Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of
Capital Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust has invested the proceeds from the issuance and
sale of the Trust Securities. See "--Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions) is guaranteed by the
Corporation on a limited basis as set forth herein under "--Description of
Guarantee."
REDEMPTION. Upon repayment on the Stated Maturity Date or prepayment
in whole or in part prior to the Stated Maturity Date of the Junior
Subordinated Debentures (other than following the distribution of the Junior
Subordinated Debentures to the holders of the Trust Securities), the proceeds
from such repayment or prepayment shall be applied by the Property Trustee to
redeem a Like Amount (as defined below) of the Trust Securities, upon not less
than 30 nor more than 60 days' notice of a date of redemption (the "Redemption
Date"), at the applicable Redemption Price, which shall be equal to (i) in the
case of the repayment of the Junior Subordinated Debentures on the Stated
Maturity Date, the Maturity Redemption Price (equal to the principal of, and
unpaid interest on, the Junior Subordinated Debentures), (ii) in the case of
the optional redemption of the Junior Subordinated Debentures before the
Initial Optional Prepayment Date upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the Junior Subordinated Debentures) and (iii) in
the case of the optional prepayment of the
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Junior Subordinated Debentures on or after the Initial Optional Prepayment
Date, the Optional Redemption Price (equal to the Optional Prepayment Price in
respect of the Junior Subordinated Debentures). See "--Description of Junior
Subordinated Debentures--Optional Prepayment" and "--Special Event
Prepayment." If less than all of the Junior Subordinated Debentures are to be
prepaid on a Redemption Date, then the proceeds of such redemption shall be
allocated to the redemption pro rata of the Capital Securities and the Common
Securities.
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
The Corporation has the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional
Prepayment Date, at the applicable Optional Prepayment Price and (ii) in whole
but not in part, at any time before the Initial Optional Prepayment Date, upon
the occurrence of a Special Event, at the Special Event Prepayment Price, in
each case subject to the receipt of any required regulatory approval.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED
DEBENTURES. The Corporation has the right at any time to terminate the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Junior Subordinated Debentures to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such right
is subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities and (ii) the receipt of any required regulatory approval.
The Trust shall automatically terminate upon the first to occur of:
(i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Corporation, as
Sponsor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly
within the discretion of the Corporation, as Sponsor); (iii) redemption of all
of the Trust Securities as described under "--Redemption;" (iv) expiration of
the term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv) or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of the Trust Securities a Like Amount of the Junior
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such holders will be entitled to
receive out of the assets of the Trust legally available for distribution to
holders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the aggregate of the Liquidation
Amount plus accumulated and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Trust
Securities shall be paid on a pro rata basis, except that if a Debenture Event
of Default has occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities. See "--Subordination of Common Securities."
If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior
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Subordinated Debentures to holders of the Trust Securities, the Trust
Securities will remain outstanding until the repayment of the Junior
Subordinated Debentures on the Stated Maturity Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate
or certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporation will issue to such holder, and the
Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive
on dissolution and liquidation of the Trust, may trade at a discount to the
price that the investor paid to purchase the Capital Securities offered hereby.
REDEMPTION PROCEDURES. If applicable, Trust Securities shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous repayment or prepayment of the Junior Subordinated Debentures.
Any redemption of Trust Securities shall be made and the applicable Redemption
Price shall be payable on the Redemption Date only to the extent that the Trust
has funds legally available for the payment of such applicable Redemption
Price. See also "-Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will deposit or cause the
Paying Agent (as defined herein) to deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price. See " Form, Denomination,
Book-Entry Procedures and Transfer." With respect to the Capital Securities
held in certificated form, the Property Trustee, to the extent funds are
legally available, will irrevocably deposit with the paying agent for the
Capital Securities funds sufficient to pay the applicable Redemption Price and
will give such paying agent irrevocable instructions and authority to pay the
applicable Redemption Price to the holders thereof upon surrender of their
certificates evidencing the Capital Securities. See " -- Payment and Paying
Agency." Notwithstanding the foregoing, Distributions payable on or prior to
the Redemption Date shall be payable to the holders of such Capital Securities
on the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of the Capital Securities
called for redemption will cease, except the right of the holders of such
Capital Securities to receive the applicable Redemption Price, but without
interest on such Redemption Price, and such Capital Securities will cease to be
outstanding. In the event that any Redemption Date of Capital Securities is not
a Business Day, then the applicable Redemption Price payable on such date will
be paid on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
next succeeding Business Day falls in the next calendar year, such payment
shall be made on the immediately preceding Business Day. In the event that
payment of the applicable Redemption Price is improperly withheld or refused
and not paid either by the Trust or by the Corporation pursuant to the
Guarantee as described under "Description of Guarantee," (i) Distributions on
Capital Securities will continue to accumulate at the then applicable rate,
from the Redemption Date originally established by the Trust to the date such
applicable Redemption Price is actually paid and (ii) the actual payment date
will be the Redemption Date for purposes of calculating the applicable
Redemption Price.
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Subject to applicable law (including, without limitation, United
States federal securities law), the Corporation or its subsidiaries may at any
time and from time to time purchase outstanding Capital Securities by tender,
in the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Corporation defaults in payment of the
applicable Redemption Price on, or in the repayment of, the Junior Subordinated
Debentures, on and after the Redemption Date Distributions will cease to accrue
on the Trust Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES. Payment of Distributions on, and
the Redemption Price of, the Trust Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any
Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the applicable Redemption Price the
full amount of such Redemption Price, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or Redemption Price of, the
Capital Securities then due and payable.
In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect
to such Event of Default until the effect of such Event of Default shall have
been cured, waived or otherwise eliminated. Until any such Event of Default has
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of the Capital Securities and not on behalf of
the Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
EVENTS OF DEFAULT; NOTICE. The occurrence of a Debenture Event of
Default (see " -- Description of Junior Subordinated Debentures -- Debenture
Events of Default") constitutes an "Event of Default" under the Trust
Agreement.
Within ten Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under " -- Liquidation of the Trust and Distribution of Junior
Subordinated Debentures" and " -- Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES. Unless a Debenture Event of Default shall
have occurred and be continuing, any Issuer Trustee may be removed at any time
by the holder of the Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may
be removed at such time by the holders of a majority in Liquidation Amount of
the outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Corporation as the holder
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of the Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES. Any Person into which the
Property Trustee, the Delaware Trustee or any Administrative Trustee that is
not a natural person may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the Trust
Agreement, provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise described under " -- Liquidation of the Trust
and Distribution of Junior Subordinated Debentures." The Trust may, at the
request of the Corporation, as Sponsor, with the consent of the Administrative
Trustees but without the consent of the holders of the Capital Securities,
merge with or into, consolidate, amalgamate, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Trust Securities or (b)
substitutes for the Trust Securities other securities having substantially the
same terms as the Trust Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Trust Securities rank in priority
with respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) the Corporation expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee with
respect to the Junior Subordinated Debentures, (iii) the Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which
the Trust Securities are then listed or quoted, if any, (iv) if the Capital
Securities (including any Successor Securities) are rated by any nationally
recognized statistical rating organization prior to such transaction, such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Capital Securities (including any Successor Securities) or,
if the Junior Subordinated Debentures are so rated, the Junior Subordinated
Debentures, to be downgraded by any such nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Corporation has
received an opinion from independent counsel to the Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than any
dilution of such holders' interests in the new entity), and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be required to register
as an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and (viii) the Corporation or any permitted
successor or assignee owns all of the common securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity not to be classified as a grantor
trust for United States federal income tax purposes. In addition,
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the Property Trustee will be required pursuant to the Indenture to exchange, as
part of the Exchange Offer, the Junior Subordinated Debentures for the Exchange
Debentures, which will have terms substantially identical to the Junior
Subordinated Debentures. See "Exchange Offer; Registration Rights."
VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT. Except as provided
below and under " -- Mergers, Consolidations, Amalgamations or Replacements of
the Trust" and " -- Description of Guarantee -- Amendments and Assignment" and
as otherwise required by law and the Trust Agreement, the holders of the
Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the
Corporation, the Property Trustee and the Administrative Trustees, without the
consent of the holders of the Trust Securities (i) to cure any ambiguity,
correct or supplement any provisions in the Trust Agreement that may be
inconsistent with any other provision, or to make any other provisions with
respect to matters or questions arising under the Trust Agreement, which shall
not be inconsistent with the other provisions of the Trust Agreement, (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the Investment Company
Act or (iii) to modify, eliminate or add any provisions of the Trust Agreement
to such extent as shall be necessary to enable the Trust or the Corporation to
conduct an Exchange Offer in the manner contemplated by the Registration Rights
Agreement; provided, however, that in each such case such action shall not
adversely affect in any material respect the interests of the holders of the
Trust Securities. Any amendments of the Trust Agreement pursuant to the
foregoing shall become effective when notice thereof is given to the holders of
the Trust Securities. The Trust Agreement may be amended by the Issuer Trustees
and the Corporation (i) with the consent of holders representing a majority
(based upon Liquidation Amount) of the outstanding Trust Securities and (ii)
upon receipt by the Issuer Trustees of an opinion of counsel experienced in
such matters to the effect that such amendment or the exercise of any power
granted to the Issuer Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status as an "investment company"
under the Investment Company Act, provided that, without the consent of each
holder of Trust Securities, the Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made
in respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
execute any trust or power conferred on the Debenture Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining
the foregoing approvals of such holders of the Capital Securities, prior to
taking any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel
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experienced in such matters to the effect that the Trust will not be classified
as an association taxable as a corporation for United States federal income tax
purposes on account of such action.
Any required approval of holders of Capital Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the Trust
Agreement.
No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Issuer Trustees or
any affiliate of the Corporation or any Issuer Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER. New Capital
Securities initially will be represented by one or more Capital Securities in
registered, global form (collectively, the "Global Capital Securities"). The
Global Capital Securities will be deposited upon issuance with the Property
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described below.
DTC has advised the Trust and the Corporation that DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system
also is available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on behalf of DTC
are recorded on the records of the Participants and Indirect Participants.
DTC also has advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants with portions of the
Liquidation Amount of the Global Capital Securities and (ii) ownership of such
interests in the Global Capital Securities will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by DTC
(with respect to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial interests in the
Global Capital Securities).
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EXCEPT AS DESCRIBED BELOW, OWNERS OF BENEFICIAL INTERESTS IN THE
GLOBAL CAPITAL SECURITIES WILL NOT HAVE CAPITAL SECURITIES REGISTERED IN THEIR
NAME, WILL NOT RECEIVE PHYSICAL DELIVERY OF CAPITAL SECURITIES IN CERTIFICATED
FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER
THE TRUST AGREEMENT FOR ANY PURPOSE.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
interests in the Global Capital Securities, or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect Participant's
records relating to the beneficial interests in the Global Capital Securities,
or (ii) any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect
of securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC
has reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of New Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust or the Corporation. None of the Trust, the Corporation or
the Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Capital Securities,
and the Trust, the Corporation and the Property Trustee may conclusively rely
on and will be protected in relying on instructions from DTC or its nominee for
all purposes.
Beneficial interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds, subject in
all cases to the rules and procedures of DTC and its participants.
DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Capital Securities (including,
without limitation, the presentation of Old Capital Securities for exchange
pursuant to the Exchange Offer) only at the direction of one or more
Participants to whose account with DTC interests in the Global Capital
Securities are credited and only in respect of such portion of the Liquidation
Amount of the Capital Securities as to which such Participant or Participants
has or have given such direction. However, if there is an Event of Default
under the Trust Agreement, DTC reserves the right to exchange the Global
Capital Securities for Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global
Capital Securities, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented by the Global
Capital Securities for all purposes under the Trust Agreement.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Corporation
believe to be reliable, but neither the Trust nor the Corporation takes
responsibility for the accuracy thereof.
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
or (y) has ceased to be a clearing
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agency registered under the Exchange Act, (ii) the Corporation in its sole
discretion elects to cause the issuance of the Capital Securities in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default under the Trust Agreement.
PAYMENT AND PAYING AGENCY. Payments in respect of the Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates. Payments in respect of Capital Securities that are not held by the
Depositary shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the register maintained by the
Securities Registrar appointed under the Trust Agreement. The paying agent
(the "Paying Agent") shall initially be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrative
Trustees and the Corporation. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Corporation. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.
RESTRICTIONS ON TRANSFER. The Capital Securities will be issued and
may be transferred only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities) and multiples of $1,000 in excess thereof.
Any attempted sale, transfer or other disposition of Capital Securities in a
block having a Liquidation Amount of less than $100,000 shall be deemed to be
void and of no legal effect whatsoever. Any such transferee shall be deemed
not to be the holder of such Capital Securities for any purpose, including but
not limited to the receipt of Distributions on such Capital Securities, and
such transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
REGISTRAR AND TRANSFER AGENT. The Property Trustee will act as
registrar and transfer agent for the Capital Securities. Registration of
transfers of the Capital Securities will be effected without charge by or on
behalf of the Trust, but upon payment of any tax or other governmental charges
that may be imposed in connection with any transfer or exchange. The Trust
will not be required to register or cause to be registered the transfer of the
Capital Securities after they have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE. The Property Trustee,
other than during the occurrence and continuance of an Event of Default,
undertakes to perform only such duties as are specifically set forth in the
Trust Agreement and, during the existence of an Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by
the Trust Agreement at the request of any holder of Trust Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. If no Event of Default has occurred and is
continuing and the Property Trustee is required to decide between alternative
courses of action, construe ambiguous provisions in the Trust Agreement or is
unsure of the application of any provision of the Trust Agreement, and the
matter is not one on which holders of the Capital Securities or the Common
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS. The Administrative Trustees are authorized and
directed to conduct the affairs of and to operate the Trust in such a way that
the Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association or
publicly-traded partnership taxable as a corporation for United States federal
income tax purposes and so that the Junior Subordinated
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Debentures will be treated as indebtedness of the Corporation for United States
federal income tax purposes. In this connection, the Corporation and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Trust
Agreement, that the Corporation and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders
of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the
Indenture. The Indenture has been qualified under the Trust Indenture Act.
This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Indenture describes the material terms thereof, but does not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms,
some of which are not otherwise defined herein, are qualified in their entirety
by reference to all of the provisions of the Indenture and those terms made a
part of the Indenture by the Trust Indenture Act.
GENERAL. Concurrently with the issuance of the Old Capital
Securities, the Trust invested the proceeds thereof, together with the
consideration paid by the Corporation for the Common Securities, in Old Junior
Subordinated Debentures issued by the Corporation. Pursuant to the Exchange
Offer, the Corporation will exchange the Old Junior Subordinated Debentures, in
an amount corresponding to the Old Capital Securities accepted for exchange,
for a like aggregate principal amount of the New Junior Subordinated Debentures
as soon as practicable after the date hereof.
The Junior Subordinated Debentures bear interest from March 10, 1997
at the annual rate of 9.875% of the principal amount thereof, payable
semi-annually in arrears on March 1 and September 1 of each year (each, an
"Interest Payment Date"), commencing September 1, 1997, to the person in whose
name each Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the 15th day of the month preceding the
month in which the relevant payment date falls. The Junior Subordinated
Debentures will mature on March 1, 2027. It is anticipated that, until the
liquidation, if any, of the Trust, each Junior Subordinated Debenture will be
held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and,
for any period of less than a full calendar month, the number of days elapsed
in such month. In the event that any date on which interest is payable on the
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such next succeeding Business Day falls in the next
succeeding calendar year, then such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 9.875% thereof, compounded
semi-annually. The term "interest," as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.
The New Junior Subordinated Debentures rank pari passu with the Old
Junior Subordinated Debentures and with all Other Debentures and are unsecured
and are subordinate and junior in right of payment to all Senior Indebtedness
to the extent and in the manner set forth in the Indenture. See
" -- Subordination."
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The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation is a legal entity separate and distinct from its subsidiaries.
Holders of Junior Subordinated Debentures should look only to the Corporation
for payments on the Junior Subordinated Debentures. The principal sources of
the Corporation's income are dividends, interest and fees from its
subsidiaries. The Corporation relies primarily on dividends from the Bank to
meet its obligations for payment of principal and interest on its outstanding
debt obligations and corporate expenses. There are regulatory limitations on
the payment of dividends directly or indirectly to the Corporation from the
Bank. As of March 31, 1997, under OTS regulations, the total capital available
for payment of dividends by the Bank to the Corporation was approximately $29.1
million. However, the OTS has the power to prohibit any act, including the
payment of dividends, if such act would reduce bank capital to a point that, in
its opinion, would render the Bank undercapitalized and thus constitute an
unsafe or unsound banking practice. In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by any of the Banks are
generally limited in amount as to the Corporation and as to each of such other
affiliates to 10% of the Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of the Bank's capital
and surplus.
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary
(including depositors, in the case of the Bank), except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary. At
March 31, 1997, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of $1.77 billion. Accordingly,
the Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries (including
the subsidiaries' deposit liabilities) and all liabilities of any future
subsidiaries of the Corporation. The Indenture does not limit the incurrence
or issuance of other secured or unsecured debt of the Corporation or any
subsidiary, including Senior Indebtedness. See " -- Subordination."
FORM, REGISTRATION AND TRANSFER. If the Junior Subordinated
Debentures are distributed to the holders of the Trust Securities, the Junior
Subordinated Debentures may be represented by one or more global certificates
registered in the name of Cede & Co. as the nominee of DTC. The depositary
arrangements for such Junior Subordinated Debentures are expected to be
substantially similar to those in effect for the Capital Securities. For a
description of DTC and the terms of the depositary arrangements relating to
payments, transfers, voting rights, redemptions and other notices and other
matters, see "Description of Capital Securities -- Form, Denomination,
Book-Entry Procedures and Transfer."
The Junior Subordinated Debentures will be issuable only in registered
form without coupons in minimum denominations of $100,000 (100 Junior
Subordinated Debentures) and integral multiples of $1,000 in excess thereof.
PAYMENT AND PAYING AGENTS. Payment of principal of (and premium, if
any) and interest on Junior Subordinated Debentures will be made at the office
of the Debenture Trustee in the City of New York or at the office of such
Paying Agent or Paying Agents as the Corporation may designate from time to
time, except that at the option of the Corporation payment of any interest may
be made, except in the case of Junior Subordinated Debentures in global form,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the register for Junior Subordinated Debentures or (ii)
by transfer to an account maintained by the Person entitled thereto as
specified in such register, provided that proper transfer instructions have
been received by the relevant Record Date. Payment of any interest on any
Junior Subordinated Debenture will be made to
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the Person in whose name such Junior Subordinated Debenture is registered at
the close of business on the Record Date for such interest, except in the case
of defaulted interest. The Corporation may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent; however the
Corporation will at all times be required to maintain a Paying Agent in each
place of payment for the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent,
or then held by the Corporation in trust, for the payment of the principal of
(and premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Corporation,
be repaid to the Corporation and the holder of such Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE. So long as no Debenture Event
of Default has occurred and is continuing, the Corporation will have the right
under the Indenture to defer the payment of interest on the Junior Subordinated
Debentures at any time and from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period shall end on a date other than an Interest Payment
Date or extend beyond the Stated Maturity Date. At the end of such Extension
Period, the Corporation must pay all interest then accrued and unpaid (together
with interest thereon at the annual rate of 9.875%, compounded semi-annually,
to the extent permitted by applicable law ("Compounded Interest")). During an
Extension Period, interest will continue to accrue and, if the Junior
Subordinated Debentures have been distributed to holders of the Trust
Securities, holders of Junior Subordinated Debentures (or holders of the Trust
Securities while Trust Securities are outstanding) will be required to accrue
such deferred interest income for United States federal income tax purposes
prior to the receipt of cash attributable to such income. See "Certain Federal
Income Tax Considerations -- Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any
Other Debentures) that rank pari passu with or junior in right of payment to
the Junior Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including any Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to the Junior
Subordinated Debentures (other than (a) dividends or distributions in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any of
the Corporation's dividend reinvestment plans).
Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any
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Interest Payment Date, the Corporation may elect to begin a new Extension
Period, subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Corporation
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Extension Period (or an extension
thereof) at least five Business Days prior to the earlier of (i) the date the
Distributions on the Trust Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period.
OPTIONAL PREPAYMENT. The Junior Subordinated Debentures will be
prepayable, in whole or in part, at the option of the Corporation on or after
the Initial Optional Prepayment Date, subject to the Corporation having
received any required regulatory approval, at a prepayment price (the "Optional
Prepayment Price") equal to the percentage of the outstanding principal amount
of the Junior Subordinated Debentures specified below, plus, in each case,
accrued and unpaid interest thereon to the date of prepayment if prepaid during
the 12-month period beginning March 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.937%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.443%
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.950%
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.456%
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.962%
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.469%
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.975%
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.481%
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.987%
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.494%
2017 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
SPECIAL EVENT PREPAYMENT. Prior to March 1, 2007, if a Special Event
shall occur and be continuing, the Corporation may, at its option and subject
to receipt of any required regulatory approval, prepay the Junior Subordinated
Debentures in whole (but not in part) at any time within 90 days of the
occurrence of such Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the Make-Whole Amount (as defined below). The
"Make-Whole Amount" shall be equal to the greater of (x) 100% of the principal
amount of the Junior Subordinated Debentures or (y) the sum, as determined by a
Quotation Agent (as defined herein), of the present values of the remaining
scheduled payments of principal and interest on the Junior Subordinated
Debentures discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of 12 30-day months) at the Adjusted Treasury Rate,
plus, in the case of each of clauses (x) and (y), accrued and unpaid interest
thereon to the date of prepayment.
A "Special Event" means a Tax Event or a Regulatory Capital Event, as
the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such
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pronouncement or decision is announced on or after the Issue Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Corporation on the Junior Subordinated
Debentures is not, or within 90 days of the date of such opinion will not be,
deductible by the Corporation, in whole or in part, for United States federal
income tax purposes or (iii) the Trust is, or will be within 90 days of the
date of such opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have
become, or pursuant to law or regulation will become within 180 days, subject
to capital requirements under which, in the written opinion of independent bank
regulatory counsel experienced in such matters, the Capital Securities would
not constitute Tier 1 Capital (as that concept is used in the guidelines or
regulations issued by the Board of Governors of the Federal Reserve System as
of the date of this Offering Memorandum) applied as if the Corporation (or its
successor) were a bank holding company, or the then-equivalent of such Tier-1
Capital.
"Adjusted Treasury Rate" means, with respect to any prepayment date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 2.90% if such prepayment date
occurs prior to March 1, 1998 and (ii) 2.40% in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Initial
Optional Prepayment Date that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Junior Subordinated Debentures.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means a nationally-recognized U.S.
Government securities dealer in New York City selected by the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such prepayment date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Debenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined
by the Debenture Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Debenture Trustee by such Reference Treasury Dealer at
5:00 p.m., New York City time, on the third Business Day preceding such
prepayment date.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.
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If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures such amounts as shall
be necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Trust Securities shall not be reduced as a result
of any additional taxes, duties and other governmental charges to which the
Trust has become subject as a result of a Tax Event ("Additional Sums").
CERTAIN COVENANTS OF THE CORPORATION. The Corporation has agreed that
it will not, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Corporation (including Other Debentures) that rank pari passu with or junior in
right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including under Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment to
the Junior Subordinated Debentures (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Corporation, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any of
the Corporation's dividend reinvestment plans) if at such time (1) there shall
have occurred any event of which the Corporation has actual knowledge that (a)
is, or with the giving of notice or the lapse of time, or both, would be, a
Debenture Event of Default and (b) in respect of which the Corporation shall
not have taken reasonable steps to cure, (2) the Corporation shall be in
default with respect to its payment of any obligations under the Guarantee or
(3) the Corporation shall have given notice of its election of an Extension
Period as provided in the Indenture and shall not have rescinded such notice,
and such Extension Period, or any extension thereof, shall have commenced and
be continuing.
So long as the Trust Securities remain outstanding, the Corporation
also has agreed (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities, provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with the distribution of Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior
Subordinated Debentures.
MODIFICATION OF INDENTURE. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of Junior
Subordinated Debentures, amend, waive or supplement the Indenture for specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies or enabling the Corporation and the Trust to conduct an
Exchange Offer as contemplated by the Registration Rights Agreement, provided
that any such action does not materially adversely affect the interest of the
holders of Junior Subordinated Debentures), and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in principal amount of Junior
Subordinated Debentures, to modify the
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Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided that no such modification may, without the
consent of the holders of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated Maturity Date, or reduce the principal amount
of the Junior Subordinated Debentures or reduce the amount payable on
redemption thereof or reduce the rate or extend the time of payment of interest
thereon except pursuant to the Corporation's right under the Indenture to defer
the payment of interest as provided therein (see " -- Option to Extend Interest
Payment Date") or make the principal of, or interest or premium on, the Junior
Subordinated Debentures payable in any coin or currency other than that
provided in the Junior Subordinated Debentures, or impair or affect the right
of any holder of Junior Subordinated Debentures to institute suit for the
payment thereof, or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture.
DEBENTURE EVENTS OF DEFAULT. The Indenture provides that any one or
more of the following described events with respect to the Junior Subordinated
Debentures constitutes a "Debenture Event of Default" (whatever the reason for
such Debenture Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (i) failure for 30 days to pay any
interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, on the Junior Subordinated Debentures or any Other
Debentures, when due (subject to the deferral of any due date in the case of an
Extension Period); or (ii) failure to pay any principal or premium, if any, on
the Junior Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or (iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after written
notice to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of Junior Subordinated
Debentures; or (iv)certain events in bankruptcy, insolvency or reorganization
of the Corporation.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have, subject to certain exceptions, the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee. The Debenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Junior Subordinated Debentures may declare the principal due and payable
immediately upon a Debenture Event of Default. The holders of a majority in
aggregate outstanding principal amount of the Junior Subordinated Debentures
may annul such declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal (or premium, if any) on or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (and premium, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee)
or a default in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Junior Subordinated Debenture.
The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
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The Indenture provides that the Debenture Trustee may withhold notice
of a Debenture Event of Default from the holders of the Junior Subordinated
Debentures if the Debenture Trustee considers it in the interest of such
holders to do so.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES. If a
Debenture Event of Default shall have occurred and be continuing and shall be
attributable to the failure of the Corporation to pay the principal of (or
premium, if any), or interest (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, if any, on the Junior Subordinated
Debentures on the due date, a holder of Capital Securities may institute a
Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payments
made to a holder of Capital Securities by the Corporation in connection with a
Direct Action, the Corporation shall remain obligated to pay the principal of
(or premium, if any) or interest (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, if any, on the Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights of the holder
of such Capital Securities with respect to payments on the Capital Securities
to the extent of any payments made by the Corporation to such holder in any
Direct Action.
The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement. See
"Description of Capital Securities Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS. The
Indenture provides that the Corporation shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties as an entirety or substantially as an entirety to the Corporation,
unless: (i) in case the Corporation consolidates with or merges into another
Person or conveys or transfers its properties substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any State or the District of Columbia, and such successor Person
expressly assumes the Corporation's obligations on the Junior Subordinated
Debentures; (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, shall have occurred and be continuing; and
(iii) certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders
of the Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE. The Indenture provides that when, among
other things, all Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation (i) have become due and payable or (ii)
will become due and payable at maturity or called for redemption within one
year, and the Corporation deposits or causes to be deposited with the Debenture
Trustee funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the Junior Subordinated Debentures not
previously delivered to the Debenture Trustee for cancellation, for the
principal (and premium, if any) and interest to the date of the deposit or to
the Stated Maturity Date, as the case may be, then the Indenture will cease to
be of further effect (except as to the Corporation's obligations to pay all
other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.
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SUBORDINATION. In the Indenture, the Corporation has covenanted and
agreed that any Junior Subordinated Debentures issued thereunder will be
subordinate and junior in right of payment to all Senior Indebtedness to the
extent provided in the Indenture. Upon any payment or distribution of assets
to creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Corporation, all Senior
Indebtedness must be paid in full before the holders of Junior Subordinated
Debentures will be entitled to receive or retain any payment in respect
thereof.
In the event of the acceleration of the maturity of Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
of such Senior Indebtedness before the holders of Junior Subordinated
Debentures will be entitled to receive or retain any payment in respect of the
Junior Subordinated Debentures.
No payments on account of principal, or premium, if any, or interest,
if any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.
"Indebtedness" means (i) every obligation of the Corporation for money
borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of the Corporation with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of
the Corporation; (iv) every obligation of the Corporation issued or assumed as
the deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of the Corporation; (vi) all
indebtedness of the Corporation whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, the
Corporation has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise.
"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" means (i) Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, to the
extent such indebtedness by its terms ranks equally with and not prior to the
Junior Subordinated Debentures in the right of payment upon the happening of
the dissolution or winding-up or liquidation or reorganization of the
Corporation and (ii) all other debt securities, and guarantees in respect of
those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a financing
vehicle of the Corporation (a "financing entity") in connection with the
issuance by such financing entity of equity securities or other securities
guaranteed by the Corporation pursuant to an instrument that ranks pari passu
with or junior in right of payment to the Guarantee. The securing of any
Indebtedness, otherwise constituting Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures.
"Indebtedness Ranking Junior to the Junior Subordinated Debentures"
means any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, to the extent such
indebtedness by its terms ranks junior to and not equally with or prior to the
Junior Subordinated Debentures (and any other Indebtedness Ranking on a Parity
with the Junior Subordinated Debentures) in right of payment upon the happening
of the dissolution or winding-up or liquidation or reorganization of the
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Corporation. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Junior Subordinated Debentures, shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking
Junior to the Junior Subordinated Debentures.
"Senior Indebtedness" means all Indebtedness, whether outstanding on
the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated
Debentures, and any deferrals, renewals or extensions of such Senior
Indebtedness.
The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation relies primarily on dividends from the Bank to meet its obligations
for payment of principal and interest on its outstanding debt obligations and
corporate expenses. The Corporation is a legal entity separate and distinct
from its subsidiaries. Holders of Junior Subordinated Debentures should look
only to the Corporation for payments on the Junior Subordinated Debentures.
There are regulatory limitations on the payment of dividends directly or
indirectly to the Corporation from the Bank. See " -- General." In addition,
the Bank is subject to certain restrictions imposed by federal law on any
extensions of credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or other securities
thereof. Such restrictions prevent the Corporation and such other affiliates
from borrowing from the Bank unless the loans are secured by various types of
collateral. Further, such secured loans, other transactions and investments by
the Bank are generally limited in amount as to the Corporation and as to each
of such other affiliates to 10% of the Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus. Accordingly, the Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries.
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary
(including depositors, in the case of the Bank), except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary. At
March 31, 1997, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of $1.77 billion. Accordingly,
the Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries (including
the subsidiaries' deposit liabilities) and all liabilities of any future
subsidiaries of the Corporation. The Indenture does not limit the incurrence
or issuance of other secured or unsecured debt of the Corporation or any
subsidiary, including Senior Indebtedness. See " -- Subordination."
RESTRICTIONS ON TRANSFER. The Junior Subordinated Debentures will be
issued, and may be transferred, only in blocks having an aggregate principal
amount of not less than $100,000 (100 Junior Subordinated Debentures) and
multiples of $1,000 in excess thereof. Any such transfer of Junior
Subordinated Debentures in a block having an aggregate principal amount of less
than $100,000 shall be deemed to be void and of no legal effect whatsoever.
Any such transferee shall be deemed not to be the holder of such Junior
Subordinated Debentures for any purpose, including but not limited to the
receipt of payments on such Junior Subordinated Debentures, and such transferee
shall be deemed to have no interest whatsoever in such Junior Subordinated
Debentures.
GOVERNING LAW. The Indenture and the Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE. Following the Exchange
Offer and the qualification of the Indenture under the Trust Indenture Act, the
Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such
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provisions, the Debenture Trustee is under no obligation to exercise any of the
powers vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities. As
soon as practicable after the date hereof, the Old Guarantee will be exchanged
by the Corporation for the New Guarantee for the benefit of the holders from
time to time of the New Capital Securities. The Guarantee Agreement has been
qualified under the Trust Indenture Act. This summary of certain provisions of
the Guarantee Agreement describes the material terms of the Guarantee, but does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Capital Securities.
GENERAL. The Corporation has agreed to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Capital Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), are subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand legally available therefor at such
time, (ii) the Redemption Price with respect to any Capital Securities called
for redemption, to the extent that the Trust has funds on hand legally
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Trust (other than in connection
with the distribution of the Junior Subordinated Debentures to holders of the
Capital Securities or the redemption of all Capital Securities), the lesser of
(a) the Liquidation Distribution, to the extent the Trust has funds legally
available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to holders of Capital Securities upon liquidation of
the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Corporation to the holders of the Capital Securities or by causing the Trust to
pay such amounts to such holders.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "--Status of
Guarantee." Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantee effectively are
subordinated to all existing and future liabilities, including deposits, of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "--Description of Junior Subordinated
Debentures--General." The Guarantee does not limit the incurrence or issuance
of other secured or unsecured debt of the Corporation, including Senior
Indebtedness, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.
The Corporation has, through the Guarantee, the Trust Agreement, the
Trust Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Capital Securities. No single document standing alone or
operating in
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conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debentures and the Guarantee."
STATUS OF GUARANTEE. The Guarantee constitutes an unsecured
obligation of the Corporation and ranks subordinate and junior in right of
payment to all Senior Indebtedness in the same manner as Junior Subordinated
Debentures.
The New Guarantee ranks pari passu with the Old Guarantee and with all
Other Guarantees issued by the Corporation. The Guarantee constitutes a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
any other person or entity). The Guarantee will be held for the benefit of the
holders of the Capital Securities. The Guarantee will not be discharged except
by payment of the Guarantee Payments in full to the extent not paid by the
Trust or upon distribution to the holders of the Capital Securities of the
Junior Subordinated Debentures. The Guarantee does not place a limitation on
the amount of additional Senior Indebtedness that may be incurred by the
Corporation.
EVENTS OF DEFAULT. An event of default under the Guarantee will occur
upon the failure of the Corporation to perform any of its payment or other
obligations thereunder, provided, however, that except with respect to a
default in payment of any Guarantee Payment, the Corporation shall have
received notice of default and shall not have cured such default within 60 days
after receipt of such notice. The holders of not less than a majority in
Liquidation Amount of the Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with
the Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
AMENDMENTS AND ASSIGNMENT. Except with respect to any changes that do
not materially adversely affect the rights of holders of the Capital Securities
(in which case no vote will be required), the Guarantee may not be amended
without the prior approval of the holders of a majority of the Liquidation
Amount of outstanding Capital Securities. The manner of obtaining any such
approval will be as set forth under "--Description of Capital
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees
and agreements contained in the Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Corporation and shall
inure to the benefit of the holders of the Capital Securities then outstanding.
TERMINATION. The Guarantee will terminate and be of no further force
and effect upon full payment of the applicable Redemption Price of the Capital
Securities, upon full payment of the Liquidation Amount payable upon
liquidation of the Trust or upon distribution of Junior Subordinated Debentures
to the holders of the Capital Securities. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Capital Securities must restore payment of any sums paid under the
Capital Securities or the Guarantee.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee,
other than during the occurrence and continuance of a default by the
Corporation in performance of the Guarantee, will undertake to perform only
such duties as are specifically set forth in the Guarantee and, after default
with respect to the Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee will be under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Capital Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
GOVERNING LAW. The Guarantee will be governed by and construed in
accordance with the laws of the State of New York.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all materials
respects to the New Securities, except that (i) the Old Securities have not
been registered under the Securities Act, are subject to restrictions on
transfer under federal and state securities laws and are entitled to certain
rights under the Registration Rights Agreement (which rights will terminate
upon consummation of the Exchange Offer), (ii) the New Capital Securities will
not provide for any increase in the Distribution rate thereon and (iii) the New
Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon. The Old Securities provide that, in the event that a
registration statement relating to the Exchange Offer has not been filed by
August 7, 1997 and declared effective by September 6, 1997, or, in certain
limited circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective by September 6, 1997, then interest will
accrue (in addition to the stated interest rate on the Old Junior Subordinated
Debentures) at the rate of 0.25% per annum on the principal amount of the Old
Junior Subordinated Debentures and Distributions will accrue (in addition to
the stated Distribution rate on the Old Capital Securities) at the rate of
0.25% per annum on the Liquidation Amount of the Old Capital Securities, for
the period from the occurrence of such event until such time as such required
Exchange Offer is consummated or any required Shelf Registration Statement is
effective. The New Securities are not, and upon consummation of the Exchange
Offer the Old Securities will not be, entitled to any such additional interest
or Distributions. Accordingly, holders of Old Capital Securities should review
the information set forth under "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities" and "Description of New Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) are irrevocably guaranteed by the Corporation as
and to the extent set forth under "Description of New Securities--Description
of Guarantee." Taken together, the Corporation's obligations under the Junior
Subordinated Debentures, the Indenture, the Trust Agreement and the Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Capital Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Capital Securities. If and to the extent that the Corporation does not make
the required payments on the Junior Subordinated Debentures, the Trust will not
have sufficient funds to make the related payments, including Distributions, on
the Capital Securities. The
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Guarantee does not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor. In such event, the remedy
of a holder of Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the Guarantee are subordinate and junior
in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Trust Securities, (ii) the interest
rate and interest and other payment dates on the Junior Subordinated Debentures
will match the Distribution rate and Distribution and other payment dates for
the Trust Securities; (iii) the Corporation, as Sponsor, shall pay for all and
any costs, expenses and liabilities of the Trust except the Trust's obligations
to holders of Trust Securities under such Trust Securities; and (iv) the Trust
Agreement provides that the Trust is not authorized to engage in any activity
that is not consistent with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or an Event of Default under the Trust Agreement.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on
Junior Subordinated Debentures would constitute an Event of Default under the
Trust Agreement.
LIMITED PURPOSE OF THE TRUST
The Trust exists for the sole purpose of issuing and selling the Trust
Securities, using the proceeds from the sale of the Trust Securities to acquire
the Junior Subordinated Debentures and engaging in only those other activities
necessary, advisable or incidental thereto. The Capital Securities represent
beneficial ownership interests in the Trust. A principal difference between
the rights of a holder of Capital Securities and a holder of Junior
Subordinated Debentures is that a holder of Junior Subordinated Debentures is
entitled to receive from the Corporation the principal amount of (and premium,
if any) and interest on Junior Subordinated Debentures held, while a holder of
Capital Securities is entitled to receive Distributions from the Trust (or, in
certain circumstances, from the Corporation under the Guarantee) if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Unless the Junior Subordinated Debentures are distributed to holders
of the Trust Securities, upon any voluntary or involuntary termination,
winding-up or liquidation of the Trust, after satisfaction of the liabilities
of creditors of the Trust as required by applicable law, the holders of the
Trust Securities will be entitled to receive, out of assets held by the Trust,
the Liquidation Distribution in cash. See "Description of New
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property Trustee,
as holder of the Junior Subordinated Debentures, would be a subordinated
creditor of the Corporation,
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subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium,
if any) and interest, before any stockholders of the Corporation receive
payments or distributions. Since the Corporation is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Capital Securities and a holder of
Junior Subordinated Debentures relative to other creditors and to stockholders
of the Corporation in the event of liquidation or bankruptcy of the Corporation
are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
In the opinion of Elias, Matz, Tiernan & Herrick L.L.P., special
federal income tax counsel to the Corporation and the Trust ("Tax Counsel"),
the following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder. This summary does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not
address the tax consequences to persons that have a functional currency other
than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of Capital Securities. Further, it does not include
any description of any alternative minimum tax consequences or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder,
the administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. An
opinion of Tax Counsel is not binding on the Internal Revenue Service (the
"IRS") or the courts. No rulings have been or are expected to be sought from
the IRS with respect to any of the transactions described herein and no
assurance can be given that the IRS will not take contrary positions.
Moreover, no assurance can be given that any of the opinions expressed herein
will not be challenged by the IRS or, if challenged, that such a challenge
would not be successful.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Capital Securities for New Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes. The exchange of Old Capital Securities for New Capital Securities
pursuant to the Exchange Offer should not be treated as an "exchange" for
United States federal income tax purposes because the New Capital Securities
should not be considered to differ materially in kind or extent from the Old
Capital Securities and because the exchange will occur by operation of the
terms of the Old Capital Securities. If, however, the exchange of the Old
Capital Securities for the New Capital Securities were treated as an exchange
for United States federal income tax purposes, such exchange should constitute
a recapitalization for federal income tax purposes. Accordingly, the New
Capital Securities should have the same issue price as the Old Capital
Securities, and a holder should have the same adjusted tax basis and holding
period in the New Capital Securities as the holder had in the Old Capital
Securities immediately before the exchange.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Old Junior Subordinated
Debentures, Tax Counsel has rendered its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Old Junior Subordinated Debentures
will be classified for United States federal income tax purposes
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as indebtedness of the Corporation. The Corporation, the Trust and the holders
of the Capital Securities (by acceptance of a beneficial interest in a Capital
Security) will agree to treat the Junior Subordinated Debentures as
indebtedness for all United States federal income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Tax
Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Trust Agreement
and the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Junior Subordinated Debentures, and each
holder will be required to include in its gross income any interest (or OID
accrued) with respect to its allocable share of those Junior Subordinated
Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations")
applicable to debt instruments issued on or after August 13, 1996, a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments of
interest is "remote" since exercising that option would prevent the Corporation
from declaring dividends on any class of its equity securities. Accordingly,
the Corporation intends to take the position, based on the advice of Tax
Counsel, that the Junior Subordinated Debentures will not be considered to be
issued with OID and, accordingly, stated interest on the Junior Subordinated
Debentures generally will be taxable to a holder as ordinary income at the time
it is paid or accrued in accordance with such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option
to defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the
Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Capital Securities would be required to include in gross income OID
even though the Corporation would not make actual cash payments during an
Extension Period. Moreover, under the Regulations, if the option to defer the
payment of interest was determined not to be "remote," the Junior Subordinated
Debentures would be treated as having been originally issued with OID. In such
event, all of a holder's taxable interest income with respect to the Junior
Subordinated Debentures would be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest or
OID, corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
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RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The Corporation will have the right at any time to liquidate the Trust
and cause the Junior Subordinated Debentures to be distributed to the holders
of the Trust Securities. Under current law, such a distribution, for United
States federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.
Under certain circumstances described herein (see "Description of New
Securities -- Description of New Capital Securities"), the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under
current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital Securities,
and a holder could recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "--Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a redemption of the
Capital Securities either on the Stated Maturity Date or upon an optional
redemption of the Junior Subordinated Debentures by the Corporation) will
recognize gain or loss equal to the difference between its adjusted tax basis
in the Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest which has
not yet been included in income, which will be treated as ordinary income). A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includable in such
holder's gross income to the date of disposition and decreased by payments (if
any) received on the Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year.
The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes
of his Capital Securities between record dates for payments of distributions
thereon will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
PROPOSED TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States federal
income tax purposes for the payment of interest in respect of certain types of
debt obligations.
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The Administration's Proposal would apply to debt obligations, such as the
Junior Subordinated Debentures, issued on or after the date of "first committee
action" with respect to the Administration's Proposal if such debt obligations
have a maximum term in excess of 15 years and are not shown as indebtedness on
the issuer's balance sheet or if such debt obligations have a maximum weighted
average maturity of more than 40 years. Under current law, the Corporation
will be able to deduct interest on the Junior Subordinated Debentures, and as
proposed the Administration's Proposal would not apply to the Junior
Subordinated Debentures because they were issued prior to the date of "first
committee action." Legislative proposals approved by the U.S. House of
Representatives and the U.S. Senate on June 26 and 27, 1997, respectively, did
not include the Administration's Proposal, and on June 30, 1997, the Clinton
Administration announced a new budget proposal which also does not appear to
include such proposal. There can be no assurance, however, that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the
Junior Subordinated Debentures for cash, in which event the holders of Capital
Securities would receive cash in redemption of their Capital Securities.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a
citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for federal income tax purposes, a corporation
or partnership created or organized (or treated as created or organized for
federal income tax purposes) in or under the laws of the United States or any
political subdivision thereof, or a trust or estate the income of which is
includible in its gross income for federal income tax purposes without regard
to its source. (For taxable years beginning after December 31, 1996 (or for
the immediately preceding taxable year, if the trustee of a trust so elects), a
trust is a U.S. Holder for federal income tax purposes if, and only if, (i) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States trustees have
the authority to control all substantial decisions of the trust.)
Under present United States federal income tax laws: (i) payments by
the Trust or any of its paying agents to any holder of a Capital Security who
or which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the
total combined voting power of all classes of stock of the Corporation entitled
to vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to
the Trust or its agent, under penalties of perjury, that it is not a United
States holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to
the Trust or its agent, under penalties of perjury, that such statement has
been received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes the Trust or its agent with a
copy thereof; and (ii) a United States Alien Holder of a Capital Security will
not be subject to United States federal withholding tax on any gain realized
upon the sale or other disposition of a Capital Security.
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are
possible, and could adversely affect the ability of the Corporation to deduct
the interest payable on the Junior Subordinated Debentures. Moreover, any such
legislation could, as the Proposed Legislation would have, adversely affect
United States Alien Holders by characterizing income derived from the Junior
Subordinated Debentures as dividends, generally subject to a 30% income tax (on
a
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withholding basis) when paid to a United States Alien Holder, rather than as
interest which, as discussed above, is generally exempt from income tax in the
hands of a United States Alien Holder.
A United States Alien Holder that holds Capital Securities in
connection with the active conduct of a United States trade or business will be
subject to income tax on all income and gains recognized with respect to its
proportionate share of the Junior Subordinated Debentures.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to
holders on Forms 1099, which forms should be mailed to holders of Capital
Securities by January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31 percent unless
the holder complies with certain identification requirements. Any withheld
amounts will be allowed as a credit against the holder's United States federal
income tax, provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON
A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may
be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA.
Any purchaser proposing to acquire Capital Securities with assets of any Plan
should consult with its counsel. The purchase and/or holding of Capital
Securities by a Plan that is subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of Section 4975 of the Code
(including individual retirement arrangements and other plans described in
Section 4975(e)(1) of the Code) and with respect to which the Corporation, the
Property Trustee or any affiliate is a service provider (or otherwise is a
party in interest or a disqualified person) may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
Capital Securities are acquired pursuant to and in accordance with an
applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts), PTCE 95-60 (an exemption for transactions involving certain
insurance company general accounts) or PTCE 95-23 (an exemption for certain
transactions determined by an in-house manager). In addition, as described
below, a Plan fiduciary considering the acquisition of Capital Securities
should be aware that the assets of the Trust may be considered "plan assets"
for ERISA purposes. In such event, service providers with respect to the
assets of the Trust may become parties in interest or disqualified persons with
respect to investing Plans, and any discretionary authority exercised with
respect to the Junior Subordinated Debentures by such persons could be deemed
to constitute a prohibited
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transaction under ERISA or the Code. In order to avoid such prohibited
transactions, each investing Plan, by acquiring the Capital Securities, will be
deemed to have directed the Trust to invest in the Junior Subordinated
Debentures and to have consented to the appointment of the Property Trustee.
In this regard, it should be noted that, in an Event of Default, the
Corporation may not remove the Property Trustee without the approval of a
majority of the holders of the Capital Securities.
A Plan fiduciary should consider whether the acquisition of Capital
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible
under the Plan's governing instrument or any investment management agreement
with the Plan. In making such determination, a Plan fiduciary should note that
the Property Trustee is a U.S. bank qualified to be an investment manager
(within the meaning of section 3(38) of ERISA) to which such a delegation of
authority generally would be permissible under ERISA. Further, prior to an
Event of Default with respect to the Junior Subordinated Debentures, the
Property Trustee will have only limited custodial and ministerial authority
with respect to Trust assets.
Under the U.S. Department of Labor regulations defining "plan assets"
for ERISA purposes (the "Plan Assets Regulations"), the assets of the Trust
will be considered plan assets of Plans owning Capital Securities unless the
aggregate investment in Capital Securities by "benefit plan investors" is not
deemed "significant" or another exception in the Plan Assets Regulations was
applicable. For this purpose, equity participation by benefit plan investors
will not be considered "significant" on any date only if, immediately after the
most recent acquisition of Capital Securities, the aggregate interest in the
Capital Securities held by benefit plan investors will be less than 25% of the
value of the Capital Securities. Although it is possible that the equity
participation by benefit plan investors in Capital Securities on any date will
not be "significant" for purposes of the Plan Assets Regulations, such result
cannot be assured.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of New Capital Securities received in exchange
for Old Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Corporation and the
Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer in connection
with resales of such New Capital Securities for a period ending 90 days after
the Expiration Date (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such New Capital Securities have
been disposed of by such Participating Broker-Dealer. However, a Participating
Broker-Dealer who intends to use this Prospectus in connection with the resale
of New Capital Securities received in exchange for Old Capital Securities
pursuant to the Exchange Offer must notify the Corporation or the Trust, or
cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "The Exchange Offer--Exchange Agent." See "The Exchange Offer--Resales
of New Capital Securities."
The Corporation or the Trust will not receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. New Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such
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prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Capital Securities.
Any broker-dealer that resells New Capital Securities that were
received by it for its own account in connection with the Exchange Offer and
any broker or dealer that participates in a distribution of such New Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of New Capital Securities and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
VALIDITY OF NEW SECURITIES
Certain matters of Delaware law relating to the validity of the New
Capital Securities and the creation of the Trust will be passed upon on behalf
of the Trust by Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware
counsel to the Trust and the Corporation. The validity of the New Guarantee
and the New Junior Subordinated Debentures will be passed upon for the
Corporation by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C. Certain
matters relating to United States federal income tax considerations will be
passed upon for the Corporation by Elias, Matz, Tiernan & Herrick L.L.P.,
Washington, D.C.
EXPERTS
The audited consolidated financial statements of the Corporation
incorporated by reference in the Corporation's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997 and incorporated by reference herein have
been incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, and upon the authority
of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the Business Corporation Law of the Commonwealth of
Pennsylvania, Article 9 of the Registrant's Articles of Incorporation provide
as follows:
ARTICLE 9. INDEMNIFICATION, ETC. OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS.
A. PERSONAL LIABILITY OF DIRECTORS. A director of the
Corporation shall not be personally liable for monetary damages for any action
taken, or any failure to take any action, as a director except to the extent
that by law a director's liability for monetary damages may not be limited.
B. INDEMNIFICATION. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, including actions by or in the
right of the Corporation, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding to the full extent permissible under
Pennsylvania law.
C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by an
officer, director, employee or agent of the Corporation in defending a civil or
criminal action, suit or proceeding described in Section B of this Article 9
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be determined that the
person is not entitled to be indemnified by the Corporation.
D. OTHER RIGHTS. The indemnification and advancement of expenses
provided by or pursuant to this Article 9 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any insurance or other agreement, vote of stockholders or
directors or otherwise, both as to actions in their official capacity and as to
actions in another capacity while holding an office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
E. INSURANCE. The Corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article 9.
F. SECURITY FUND; INDEMNITY AGREEMENTS. By action of the Board
of Directors (notwithstanding their interest in the transaction), the
Corporation may create and fund a trust fund or fund of any nature, and may
enter into agreements with its officers, directors, employees and agents for
the purpose of securing or insuring in any manner its obligation to indemnify
or advance expenses provided for in this Article 9.
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G. MODIFICATION. The duties of the Corporation to indemnify and
to advance expenses to any person as provided in this Article 9 shall be in the
nature of a contract between the Corporation and each such person, and no
amendment or repeal of any provision of this Article 9, and no amendment or
termination of any trust or other fund created pursuant to Section F of this
Article 9, shall alter to the detriment of such person the right of such person
to the advance of expenses or indemnification related to a claim based on an
act or failure to act which took place prior to such amendment, repeal or
termination.
H. PROCEEDINGS INITIATED BY INDEMNIFIED PERSONS. Notwithstanding
any other provision of this Article 9, the Corporation shall not indemnify a
director, officer, employee or agent for any liability incurred in an action,
suit or proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of
or participation in the action, suit or proceeding is authorized, either before
or after its commencement, by the affirmative vote of a majority of the
directors in office.
In addition, the Corporation carries a liability insurance policy for
its officers and directors.
Under the Declaration of Trust of ML Capital Trust I, the Corporation
has agreed to indemnify each of the Trustees of the Trust, and to hold each
Trustee harmless against any loss, damage, claim, liability or expense incurred
without negligence or bad faith on its part, arising out of, or in connection
with, the acceptance or administration of the Declaration of Trust, including
the costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
under the Trust.
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ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.1 Indenture of the Corporation relating to the Junior Subordinated Debentures(1)
4.2 Form of Certificate of New Junior Subordinated Debenture
4.3 Certificate of Trust of ML Capital Trust I
4.4 Amended and Restated Declaration of Trust of ML Capital Trust I(1)
4.5 Form of New Capital Security Certificate for ML Capital Trust I
4.6 Form of New Guarantee of the Corporation relating to the New Capital Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P. as to legality of the New Junior Subordinated
Debentures and the New Guarantee to be issued by the Corporation*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to legality of the New Capital Securities to be issued by ML
Capital Trust I*
8 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain federal income tax matters*
12.1 Computation of ratio of earnings to fixed charges (excluding interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including interest on deposits)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in Exhibit 5.1)*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.2)*
24 Power of Attorney of certain officers and directors of the Corporation (located on the signature page hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under the Declaration of Trust of ML
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Bank of New York under the New Guarantee for the benefit of the holders
of New Capital Securities of ML Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- --------------------
* To be filed by amendment.
(1) Incorporated by reference from the Corporation's Annual Report on Form
10-K for the year ended March 31, 1997 filed with the Commission on June 30,
1997.
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Each of the undersigned Registrants hereby also undertakes:
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(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement; provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by a Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of each undersigned Registrant pursuant to the provisions, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each undersigned Registrant of expenses incurred or paid by a
director, officer of controlling person of each Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, each Registrant will, unless in the opinion of its counsel the
matter has been settled by the controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Each of the undersigned Registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the Prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned Registrants hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired or involved therein, that was not the subject of
and included in the registration statement when it became effective.
II-4
<PAGE> 77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ML
Bancorp, Inc. certifies that it has reasonable grounds that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Villanova, Commonwealth of Pennsylvania on the 10th
day of July 1997.
ML BANCORP, INC.
By: /s/Dennis S. Marlo
--------------------------------------
Dennis S. Marlo
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the directors and/or officers
of ML Bancorp, Inc. whose signature appears below hereby appoints Dennis S.
Marlo and Brian M. Hartline, and each of them severally, as his or her
attorney-in-fact to sign in his or her name and behalf, in any and all
capacities stated below and to file with the Securities and Exchange Commission
any and all amendments, including post-effective amendments, to this
Registration Statement on Form S-4, making such changes in the Registration
Statement as appropriate, and generally to do all such things in their behalf
in their capacities as directors and/or officers to enable ML Bancorp, Inc. to
comply with the provisions of the Securities Act of 1933, and all requirements
of the Securities and Exchange Commission.
/s/Dennis S. Marlo Date: July 10, 1997
- -------------------------------------
Dennis S. Marlo
President, Chief Executive
Officer and Director
(principal executive officer)
/s/Brian M. Hartline Date: July 10, 1997
- -------------------------------------
Brian M. Hartline
Secretary, Treasurer and
Chief Financial Officer
(principal financial and
accounting officer)
/s/John R. Eppinger Date: July 10, 1997
- -------------------------------------
John R. Eppinger
Chairman of the Board
/s/David B. Hastings Date: July 10, 1997
- -------------------------------------
David B. Hastings
Director
II-5
<PAGE> 78
- ------------------------------------- Date: July __, 1997
John J. Leahy
Director
- ------------------------------------- Date: July __, 1997
Henry M. Luedecke
Director
/s/Allan Woolford Date: July 10, 1997
- -------------------------------------
Allan Woolford
Director
II-6
<PAGE> 79
Pursuant to the requirements of the Securities Act of 1933, ML Capital
Trust I certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Villanova, Commonwealth of Pennsylvania, on the 10th
day of July 1997.
ML CAPITAL TRUST I
By: /s/Dennis S. Marlo
------------------------------
Dennis S. Marlo
Administrative Trustee
By: /s/Brian M. Harline
------------------------------
Brian M. Hartline
Administrative Trustee
By: /s/William J. Glinski
------------------------------
William J. Glinski
Administrative Trustee
II-7
<PAGE> 80
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Indenture of the Corporation relating to the Junior
Subordinated Debentures(1)
4.2 Form of Certificate of New Junior Subordinated Debenture
4.3 Certificate of Trust of ML Capital Trust I
4.4 Amended and Restated Declaration of Trust of ML Capital
Trust I(1)
4.5 Form of New Capital Security Certificate for ML Capital
Trust I
4.6 Form of New Guarantee of the Corporation relating to the New
Capital Securities
4.7 Registration Rights Agreement
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P.
as to legality of the New Junior Subordinated Debentures and
the New Guarantee to be issued by the Corporation*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
legality of the New Capital Securities to be issued by ML
Capital Trust I*
8 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain
federal income tax matters*
12.1 Computation of ratio of earnings to fixed charges (excluding
interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in
Exhibit 5.1)*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included
in Exhibit 5.2)*
24 Power of Attorney of certain officers and directors of the
Corporation (located on the signature page hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Declaration of Trust of ML
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Bank of New York
under the New Guarantee for the benefit of the holders of New
Capital Securities of ML Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
- -----------
* To be filed by amendment.
(1) Incorporated by reference from the Corporation's Annual Report on Form
10-K for the year ended March 31, 1997 filed with the Commission on June 30,
1997.
<PAGE> 1
EXHIBIT 4.2
Form of Certificate of New Subordinated Debenture
<PAGE> 2
EXHIBIT 4.2
(FORM OF FACE OF SECURITY)
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 (100
SECURITIES). ANY SUCH TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE
RECEIPT OF PRINCIPAL, PREMIUM (IF ANY) OR INTEREST OF SUCH SECURITIES, AND SUCH
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.
<PAGE> 3
No.
ML BANCORP, INC.
9.875% SERIES B JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURE DUE MARCH 1, 2027
ML Bancorp, Inc., a Pennsylvania corporation (the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to The Bank of New
York, as Property Trustee for ML Capital Trust I or registered assigns, the
principal sum of ________________________ dollars ($__________) on March 1, 2027
(the "Maturity Date"), unless previously redeemed, and to pay interest on the
outstanding principal amount hereof from March 10, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, semi-annually (subject to deferral
as set forth herein) in arrears on March 1 and September 1 of each year,
commencing September 1, 1997, at the rate of 9.875% per annum until the
principal hereof shall have become due and payable, and on any overdue principal
and premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded semi-annually. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. In the event that any
date on which the principal of (or premium, if any) or interest on this Security
is payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that if such next
succeeding Business Day falls in the next calendar year, then such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. Pursuant to the Indenture, in certain
circumstances the Company will be required to pay Additional Sums and Compounded
Interest (each as defined in the Indenture) with respect to this Security.
Pursuant to the Registration Rights Agreement, in certain limited circumstances
the Company will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be at the
close of business on the 15th day of the month preceding the month in which the
relevant interest payment date falls. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
holders on such regular record date and may be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a special record
2
<PAGE> 4
date to be fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the holders of Securities not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if any,
on this Security shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that, payment of interest may be made at the
option of the Company by (i) check mailed to the holder at such address as shall
appear in the Security Register or (ii) by transfer to an account maintained by
the Person entitled thereto, provided that proper written transfer instructions
have been received by the relevant record date. Notwithstanding the foregoing,
so long as the Holder of this Security is the Property Trustee, the payment of
the principal of (and premium, if any) and interest (including Compounded
Interest and Additional Sums, if any) and Liquidated Damages, if any, on this
Security will be made at such place and to such account as may be designated by
the Property Trustee.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
3
<PAGE> 5
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed and sealed.
Dated: ________ __, 1997
ML BANCORP, INC.
By
--------------------------
Name: Brian M. Hartline
Title: Executive Vice President,
Chief Financial Officer and
Secretary
Attest:
By:
-----------------------
Name: Suzanne Bobbitt
Title: Assistant Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
By
--------------------
Authorized Signatory
4
<PAGE> 6
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of March 10,
1997 (the "Indenture"), duly executed and delivered between the Company and The
Bank of New York, as Trustee (the "Trustee"), to which Indenture reference is
hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.
Upon the occurrence and continuation of a Special Event prior to
March 1, 2007 (the "Initial Optional Redemption Date"), the Company shall have
the right, at any time within 90 days following the occurrence of such Special
Event, to redeem this Security in whole (but not in part) at the Special Event
Redemption Price. "Special Event Redemption Price" shall mean, with respect to
any redemption of the Securities following a Special Event, an amount in cash
equal to the Make Whole Amount. The "Make Whole Amount" shall mean an amount
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of remaining
scheduled payments of principal and interest, discounted to the prepayment date
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in the case of each of clauses (i)
and (ii), any accrued and unpaid interest thereon (including Compounded Interest
and Additional Sums, if any) and Liquidated Damages, if any, to the date of such
redemption.
In addition, the Company shall have the right to redeem this
Security, in whole or in part, at any time on or after the Initial Optional
Redemption Date (an "Optional Redemption"), at the redemption prices set forth
below (expressed as percentages of principal to be redeemed) plus, in each case,
accrued and unpaid interest thereon (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, to the applicable date of
redemption (the "Optional Redemption Price") if redeemed during the 12-month
period beginning March 1 of the years indicated below.
5
<PAGE> 7
Year Percentage
- ---- ----------
2007 104.937%
2008 104.443%
2009 103.950%
2010 103.456%
2011 102.962%
2012 102.469%
2013 101.975%
2014 101.481%
2015 100.987%
2016 100.494%
2017 and thereafter 100.000%
The Optional Redemption Price or the Special Event Redemption
Price, as the case requires, shall be paid prior to 12:00 noon, New York time,
on the date of such redemption or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Redemption Price by 10:00 a.m., New York City,
on the date such Redemption Price is to be paid. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice.
If the Securities are only partially redeemed by the Company pursuant to an
Optional Redemption, the particular Securities to be redeemed shall be selected
on a pro rata basis not more than 60 days prior to the date fixed for redemption
from the outstanding Securities not previously called for redemption, provided,
however, that with respect to Securityholders that would be required to hold
Securities with an aggregate principal amount of less than $100,000 but more
than an aggregate principal amount of zero as a result of such pro rata
redemption, the Company shall redeem Securities of each such Securityholder so
that after such redemption such Securityholder shall hold Securities either with
an aggregate principal amount of at least $100,000 or such Securityholder no
longer holds any Securities and shall use such method (including, without
limitation, by lot) as the Company shall deem fair and appropriate, provided,
further, that any such proration may be made on the basis of the aggregate
principal amount of Securities held by each Securityholder thereof and may be
made by making such adjustments as the Company deems fair and appropriate in
order that only Securities in denominations of $1,000 or integral multiples
thereof shall be redeemed.
6
<PAGE> 8
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by
the Company shall be subject to the receipt of any required regulatory approval.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
change the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any of the Securities or
a default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future holders and owners of this Security and of
any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Compounded Interest and Additional
Sums, if any) and Liquidated Damages, if any, on this Security at the time and
place and at the rate and in the money herein prescribed.
7
<PAGE> 9
So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not extending beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period") or ending on a date other
than an Interest Payment Date, at the end of which period the Company shall pay
all interest then accrued and unpaid (together with interest thereon at the rate
specified for the Securities to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further defer payments of interest by
further extending such Extended Interest Payment Period, provided that such
Extended Interest Payment Period, together with all such previous and further
extensions within such Extended Interest Payment Period, (i) shall not exceed 10
consecutive semi-annual periods, including the first semi-annual period during
such Extended Interest Payment Period, (ii) shall not end on any date other than
an Interest Payment Date, and (iii) shall not extend beyond the Maturity Date of
the Securities. Upon the termination of any such Extended Interest Payment
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any Subsidiary of the
Company if such guarantee ranks pari passu or junior in right of payment to the
Securities (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, Common Stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholder's rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Capital Securities Guarantee, (d) as a result of a
reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock, for another
class or series of the Company's capital stock, (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the exchange or
conversion of such capital stock or the security being exchanged or converted
and (f) purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans) if at such time
(1) there shall have occurred any event of which the Company has actual
knowledge that (a) is or, with the giving of notice or the lapse of time, or
both, would be, an Event of Default and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (2) if the Securities are held by
ML Capital Trust, the Company shall be in default with respect to its
8
<PAGE> 10
payment obligations under the Capital Securities Guarantee or (3) the Company
shall have given notice of its election of the exercise of its right to extend
the interest payment period and any such extension shall be continuing.
Subject to (i) the receipt of any required regulatory approval
and (ii) the receipt by the Company of an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Capital Securities,
the Company will have the right at any time to liquidate the ML Capital Trust
and cause the Securities to be distributed to the holders of the Trust
Securities in liquidation of the Trust.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to the transfer restrictions limitations
as may be contained herein and therein from time to time, this Security is
transferable by the holder hereof on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying agent,
any transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
9
<PAGE> 11
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
10
<PAGE> 1
EXHIBIT 4.3
Certificate of Trust of ML Capital Trust I
<PAGE> 2
EXHIBIT 4.3
CERTIFICATE OF TRUST
OF
ML CAPITAL TRUST I
This Certificate of Trust is being executed as of March 3, 1997 for the
purpose of organizing a business trust pursuant to the Delaware Business Trust
Act, 12 Del.C. Sections 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "ML Capital Trust I" (the
"Trust").
2. Delaware Trustee. The name and business address of the Delaware
resident trustee of the Trust meeting the requirements of Section 3807 of the
Act are as follows:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
immediately upon filing in the Office of the Secretary of the State of Delaware.
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being all the trustees of the Trust,
have duly executed this Certificate of Trust as of the day and year first above
written.
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Mary Jane Morrissey
---------------------------------------
Name: Mary Jane Morrissey
Authorized Signatory
ADMINISTRATIVE TRUSTEE
By: /s/ Brian M. Hartline
---------------------------------------
Name: Brian M. Hartline
ADMINISTRATIVE TRUSTEE
By: /s/ Dennis S. Marlo
---------------------------------------
Name: Dennis S. Marlo
ADMINISTRATIVE TRUSTEE
By: /s/ William J. Glinski
---------------------------------------
Name: William J. Glinski
ML BANCORP, INC.,
as Sponsor
By: /s/ Brian M. Hartline
---------------------------------------
Name: Brian M. Hartline
Title: Executive Vice President
and Chief Financial Officer
2
<PAGE> 1
EXHIBIT 4.5
Form of New Capital Security Certificate for ML Capital Trust I
<PAGE> 2
EXHIBIT 4.5
SERIES B CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY
IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES). ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO
THE RECEIPT OF DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
<PAGE> 3
Certificate No. Aggregate Liquidation
Amount: $
Number of Series B
Capital Securities:
CUSIP NO.
Certificate Evidencing Series B Capital Securities
of
ML Capital Trust I
Series B 9.875% Capital Securities
(liquidation amount $1,000 per Capital Security)
ML Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that _________
(the "Holder") is the registered owner of [______ securities of the Trust]* [the
aggregate liquidation amount of securities of the Trust specified in Schedule A
hereto]** representing undivided beneficial interests in the assets of the Trust
designated the Series B 9.875% Capital Securities (liquidation amount $1,000 per
Capital Security) (the "Capital Securities"). Subject to the Declaration (as
defined below), the Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of March 10, 1997, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Capital
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee, the Common Securities Guarantee (as may be appropriate), and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in the Debentures.
* Insert in Definitive Capital Securities only.
** Insert in Global Capital Securities only.
2
<PAGE> 4
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
Dated: ________ __, 1997
ML CAPITAL TRUST I
By:
--------------------------------
Name: Brian M. Hartline
Title: Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
THE BANK OF NEW YORK
as Property Trustee
Dated: ______ __, 1997
By:
------------------------
Authorized Signatory
3
<PAGE> 5
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a
rate per annum of 9.875% (the "Coupon Rate") of the liquidation amount of $1,000
per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions," as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for, if no Distributions have been paid or duly provided for, from
March 10, 1997 and will be payable semi-annually in arrears, on March 1 and
September 1 of each year, commencing on September 1, 1997, except as otherwise
described below. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a date other
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions also
will be deferred. Despite such deferral, semi-annual Distributions will continue
to accumulate with interest thereon (to the extent permitted by applicable law,
but not at a rate exceeding the rate of interest then accruing on the
Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
4
<PAGE> 6
Subject to the receipt of any required regulatory approval and to
certain other conditions set forth in the Declaration and the Indenture, the
Property Trustee may, at the direction of the Sponsor, at any time liquidate the
Trust and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
5
<PAGE> 7
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -----------------------------------------------------------------
- -----------------------------------------------------------------
agent to transfer
- -----------------------------------------------------------
this Capital Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
-----------------------
Signature:
------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee*:
-----------------------------------
- ----------------------
* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934,
as amended.
6
<PAGE> 8
Schedule A
The initial number of Capital Securities evidenced by the Certificate to
which this Schedule is attached is ______ (having an aggregate liquidation
amount of $________). The notations in the following table evidence decreases
and increases in the number of Capital Securities evidenced by such Certificate.
<TABLE>
<CAPTION>
Number of Capital
Decrease in Num- Increase in Num- Securities Remaining
ber of Capital ber of Capital after such Decrease Notation by
Securities Securities or Increase Registrar
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
</TABLE>
7
<PAGE> 1
EXHIBIT 4.6
Form of New Guarantee of the Corporation
relating to the ML Securities
<PAGE> 2
EXHIBIT 4.6
====================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
ML Bancorp, Inc.
Dated as of ________ __, 1997
====================================
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------------------
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------------------------
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------------------------------
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee . . . . . . . . . . . . . . . . . . . . 6
---------------------------------------------------
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee . . . . . . . . . . . . . . . . . 6
--------------------------------------------------------
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 7
------------------------------------------------
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------------------------
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------------
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
---------------------
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee
-----------------------------------------------------
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee . . . . . . . . . . . . . . . . . . 9
------------------------------------------------------
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital Securities Guarantee . . . . . 11
---------------------------------------------------------------------------------
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . 12
-------------------------------------------------
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee Trustee . . . . . . . 12
----------------------------------------------------------------------------
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------------
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------------------
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------------
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------------------------
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-----------
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-----------
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------
</TABLE>
ii
<PAGE> 5
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital Securities
Guarantee"), dated as of ________, 1997, is executed and delivered by ML
Bancorp, Inc., a Pennsylvania corporation (the "Guarantor"), and The Bank of
New York, a New York banking corporation, as trustee (the "Capital Securities
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Series B Capital Securities (as defined herein) of ML
Capital Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 10, 1997, among the trustees of
the Issuer, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer intends
to issue capital securities designated the 9.875% Series B capital securities
(collectively, the "Series B Capital Securities") in exchange for its
outstanding Series A 9.875% Capital Securities (collectively, the "Series A
Capital Securities") upon consummation of the Exchange Offer (as defined in the
Declaration) such Series B Capital Securities to be issued in a number, up to
50,000, and with an aggregate liquidation amount, up to $50,000,000, equal to
the number and aggregate liquidation amount of the Series A Capital Securities
exchanged for Series B Capital Securities pursuant to the Exchange Offer; and
WHEREAS, as incentive for the Holders of Series B Capital
Securities to exchange the Series A Capital Securities for the Series B Capital
Securities in the Exchange Offer, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Series B Capital
Securities Guarantee, to pay to the Holders of the Series B Capital Securities
the Guarantee Payments (as defined below) and to make certain other payments on
the terms and conditions set forth herein; and
WHEREAS, the Guarantor has executed and delivered (i) a Common
Securities Guarantee Agreement, dated as of March 10, 1997 (the "Common
Securities Guarantee"), and (ii) a Series A Capital Securities Guarantee
Agreement, dated as of March 10, 1997, between the Guarantor and the Capital
Securities Guarantee Trustee (the "Series A Capital Securities Guarantee"), in
each case with terms substantially identical to this Series B Capital
Securities Guarantee and for the benefit of the holder(s) of the Common
Securities (as defined herein) and the Series A Capital Securities,
respectively, except that if an Event of Default (as defined in the
Declaration) has occurred and is continuing, the rights of holder(s) of the
Common Securities to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set forth in the
Common Securities Guarantee, to the rights of holders of the Series B Capital
Securities and the Series A Capital Securities to receive Guarantee Payments
under this Series B Capital Securities Guarantee and the Series A Capital
Securities Guarantee, respectively.
NOW, THEREFORE, in consideration of the purchase by each
Holder, which purchase the Guarantor hereby acknowledges shall benefit the
Guarantor, the Guarantor executes
<PAGE> 6
and delivers this Series B Capital Securities Guarantee for the benefit of the
Holders of the Series B Capital Securities.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Capital Securities Guarantee, unless the
context otherwise requires:
(a) Capitalized terms used in this Series B Capital
Securities Guarantee but not defined in the preamble
above have the respective meanings assigned to them
in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Series B Capital Securities
Guarantee have the same meaning when used in this
Series B Capital Securities Guarantee unless
otherwise defined in this Series B Capital Securities
Guarantee;
(c) a term defined anywhere in this Series B Capital
Securities Guarantee has the same meaning throughout;
(d) all references to "the Series B Capital Securities
Guarantee" or "this Series B Capital Securities
Guarantee" are to this Series B Capital Securities
Guarantee as modified, supplemented or amended from
time to time;
(e) all references in this Series B Capital Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Series B Capital Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Series B Capital
Securities Guarantee, unless otherwise defined in
this Series B Capital Securities Guarantee or unless
the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Villanova, Pennsylvania are authorized or required by law or executive order to
close.
2
<PAGE> 7
"Capital Securities Guarantee Trustee" means The Bank of New
York, a New York banking corporation, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Series B Capital Securities Guarantee and thereafter means
each such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital
Securities Guarantee Trustee at which the corporate trust business of the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, New York, New York 10286.
"Covered Person" means any Holder of Series B Capital
Securities.
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the Series B 9.875% Junior Subordinated Deferrable
Interest Debentures due March 1, 2027 held by the Property Trustee (as defined
in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Series B Capital Securities
Guarantee, provided, however, that except with respect to a default in payment
of any Guarantee Payment, the Guarantor shall have received notice of default
and shall not have cured such default within 60 days after receipt of such
notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Series B Capital
Securities, to the extent not paid or made by the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Declaration) that are required to
be paid on such Series B Capital Securities to the extent the Issuer has funds
on hand legally available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds on hand legally
available therefor at such time, with respect to any Series B Capital
Securities called for redemption by the Issuer and (iii) upon a voluntary or
involuntary termination and liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for Series B
Capital Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Series B Capital Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer. If an Event of Default has occurred and is
continuing, no Guarantee Payments under the Common Securities Guarantee with
respect to the Common Securities or any guarantee payment under any Other
Common Securities Guarantees shall be made until the Holders shall be paid in
full the Guarantee Payments to which they are entitled under this Series B
Capital Securities Guarantee.
3
<PAGE> 8
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Series B Capital Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Series
B Capital Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Person known to a
Responsible Officer of the Capital Securities Guarantee Trustee to be an
Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee
Trustee, any Affiliate of the Capital Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.
"Indenture" means the Indenture dated as of March 10, 1997,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee (the "Indenture Trustee"), pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in
Section 5.01 of the Indenture.
"Majority in liquidation amount of the Series B Capital
Securities" means, except as provided by the Declaration or by the Trust
Indenture Act, a vote by Holder(s) of more than 50% of the aggregate
liquidation amount of all Series B Capital Securities.
"Officers' Certificate" means, with respect to the Guarantor,
a certificate signed by any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Series B Capital Securities Guarantee (other than pursuant
to Section 314(d)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same
meaning as "Other Guarantees" as defined in the Common Securities Guarantee.
4
<PAGE> 9
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts to be established
by the Guarantor (if any), in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by the
Guarantor with respect to capital securities (if any) similar to the Series B
Capital Securities issued by other trusts to be established by the Guarantor
(if any), in each case similar to the Issuer.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 10, 1997, by and among the Guarantor, the Issuer
and the initial purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Capital
Securities Guarantee Trustee, any officer within the Corporate Trust Office of
the Capital Securities Guarantee Trustee with direct responsibility for the
administration of this Series B Capital Securities Guarantee and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Successor Capital Securities Guarantee Trustee" means a
successor Capital Securities Guarantee Trustee possessing the qualifications to
act as Capital Securities Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means the Common Securities, the Series A
Capital Securities and the Series B Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Capital Securities Guarantee is subject
to the provisions of the Trust Indenture Act that are required to be part of
this Series B Capital Securities Guarantee and shall, to the extent applicable,
be governed by such provisions; and
5
<PAGE> 10
(b) if and to the extent that any provision of this
Series B Capital Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee (unless the Capital Securities Guarantee Trustee is otherwise the
registrar of the Capital Securities) with a list, in such form as the Capital
Securities Guarantee Trustee may reasonably require, of the names and addresses
of the Holders ("List of Holders") as of such date, (i) within one Business Day
after January 15 and July 15 of each year, and (ii) at any other time within 30
days of receipt by the Guarantor of a written request for a List of Holders as
of a date no more than 14 days before such List of Holders is given to the
Capital Securities Guarantee Trustee, provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Capital Securities
Guarantee Trustee by the Guarantor. The Capital Securities Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Capital Securities Guarantee Trustee shall comply
with its obligations under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15,
1997, the Capital Securities Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Capital Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act, provided that such compliance
certificate shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports, information and
documents to the Capital Securities Guarantee Trustee is for informational
purposes only and the Capital Securities Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
6
<PAGE> 11
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Series B Capital Securities Guarantee that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Series B
Capital Securities may, by vote, on behalf of all Holders, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Series B Capital
Securities Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Capital Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to this Capital
Securities Guarantee, mail by first class postage prepaid, to all Holders,
notices of all defaults actually known to a Responsible Officer, unless such
defaults have been cured before the giving of such notice, provided, that,
except in the case of default in the payment of any Guarantee Payment, the
Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the
holders of the Series B Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Capital Securities
Guarantee Trustee shall have received written notice from the Guarantor, or a
Responsible Officer charged with the administration of this Series B Capital
Securities Guarantee shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Series B Capital Securities Guarantee for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee
(a) This Series B Capital Securities Guarantee shall be
held by the Capital Securities Guarantee Trustee for the benefit of the
Holders, and the Capital Securities Guarantee Trustee shall not transfer this
Series B Capital Securities Guarantee to any Person except a Holder exercising
his or her rights pursuant to Section 5.4(b) or to a Successor Capital
Securities Guarantee Trustee on acceptance by such Successor Capital Securities
Guarantee Trustee of its appointment to act as Successor Capital Securities
Guarantee Trustee. The right, title and interest of the Capital Securities
Guarantee Trustee shall automatically vest in any Successor Capital Securities
Guarantee Trustee, and such vesting and succession of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Capital Securities
Guarantee Trustee shall enforce this Series B Capital Securities Guarantee for
the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Series B Capital Securities Guarantee, and
no implied covenants shall be read into this Series B Capital Securities
Guarantee against the Series B Capital Securities Guarantee Trustee. In case
an Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer, the Capital
Securities Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Series B Capital Securities Guarantee, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Series B Capital Securities
Guarantee shall be construed to relieve the Capital Securities Guarantee
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Series B Capital Securities
Guarantee, and the Capital Securities Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Series B
Capital Securities Guarantee, and no implied
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covenants or obligations shall be read into this Series B
Capital Securities Guarantee against the Capital Securities
Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Capital Securities Guarantee Trustee and conforming to
the requirements of this Series B Capital Securities
Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Series B Capital
Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Capital Securities
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Series B Capital Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Capital Securities Guarantee Trustee,
or exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guarantee;
and
(iv) no provision of this Series B Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Capital Securities Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Series B Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Capital Securities Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
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debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Series B Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Series B
Capital Securities Guarantee, the Capital Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Capital
Securities Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Capital Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Capital
Securities Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Series B Capital
Securities Guarantee from any court of competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by
this Series B Capital Securities Guarantee at the request or direction
of any Holder, unless such Holder shall have provided to the Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Capital Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Capital Securities Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Series B Capital
Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Capital Securities
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Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Capital Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guarantee
Trustee or its agents hereunder shall bind the Holders, and the
signature of the Capital Securities Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Capital Securities Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Series B Capital
Securities Guarantee, both of which shall be conclusively evidenced by
the Capital Securities Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Series B Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the Capital
Securities Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Series B Capital
Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith, without negligence, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Series B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities
Guarantee shall be deemed to impose any duty or obligation on the Capital
Securities Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Capital Securities Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Capital
Securities Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Series B Capital
Securities Guarantee
The recitals contained in this Series B Capital Securities
Guarantee shall be taken as the statements of the Guarantor, and the Capital
Securities Guarantee Trustee does not assume
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any responsibility for their correctness. The Capital Securities Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Securities Guarantee
Trustee shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and with
the effect set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or
shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Capital Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the penultimate paragraph thereof.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities
Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Capital Securities
Guarantee Trustee has been
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appointed and has accepted such appointment by written instrument executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold
office until a Successor Capital Securities Guarantee Trustee shall have been
appointed or until its removal or resignation. The Capital Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Capital Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee
shall have been appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery of an instrument of removal or resignation,
the Capital Securities Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a Successor
Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Capital Securities
Guarantee Trustee.
(f) Upon termination of this Series B Capital Securities
Guarantee or removal or resignation of the Capital Securities Guarantee Trustee
pursuant to this Section 4.2, the Guarantor shall pay to the Capital Securities
Guarantee Trustee all amounts due to the Capital Securities Guarantee Trustee
accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Series B Capital Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand
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for payment, any right to require a proceeding first against the Issuer or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Series B Capital Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Series B Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Series B Capital
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Series B Capital Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Series B
Capital Securities, or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Series B Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
(g) the consummation of the Exchange Offer; or
(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
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There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of
the Series B Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Capital
Securities Guarantee Trustee in respect of this Series B Capital Securities
Guarantee or exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Series B Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to
enforce such Series B Capital Securities Guarantee, any Holder may institute a
legal proceeding directly against the Guarantor to enforce the Capital
Securities Guarantee Trustee's rights under this Series B Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Capital Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Series B Capital Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to such Holders
by the Guarantor under this Series B Capital Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Series B Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Series B Capital Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Series B Capital Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (h), inclusive, of Section 5.3
hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Series B Capital Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Guarantor's capital stock (which includes common and preferred
stock), (ii) make any payment of principal of, or premium, if any, or interest
on or repay, repurchase or redeem any debt securities of the Guarantor
(including any Other Debentures) that rank pari passu with or junior in right
of payment to the Debentures or (iii) make any guarantee payments with respect
to any guarantee by the Guarantor of the debt securities of any subsidiary of
the Guarantor (including Other Guarantees) if such guarantee ranks pari passu
with or junior in right of payment to the Debentures (other than (a) dividends
or distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under the
Series A Capital Securities Guarantee and the Series B Capital Securities
Guarantee, (d) as a result of a reclassification of the Guarantor's capital
stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's
capital stock, (e) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans) if at such
time (i) there shall have occurred any event of which the Guarantor has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would be an Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) if such
Debentures are held by the Property Trustee, the Guarantor shall be in default
with respect to its payment of any obligations under this Series B Capital
Securities Guarantee or (iii) the Guarantor shall have given notice of its
election of the exercise of its right to extend the interest payment period
pursuant to Section 16.01 of the Indenture and any such extension shall be
continuing.
SECTION 6.2 Ranking
This Series B Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior Indebtedness (as defined in the Indenture), to
the same extent and in the same manner that the Debentures are subordinated to
Senior Indebtedness pursuant to the Indenture, (ii) pari passu with the
Debentures, the Other Debentures, the Series A Capital Securities Guarantee,
the Common Securities Guarantee and any Other Guarantee and any Other Common
Securities Guarantee, and (iii) senior to the Guarantor's capital stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Capital Securities Guarantee shall terminate (i)
upon full payment of the Redemption Price (as defined in the Declaration) of
all Series B Capital Securities, or (ii) upon liquidation of the Issuer, the
full payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to the Holders and the holders of Common
Securities. Notwithstanding the foregoing, this Series B Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Series B Capital Securities or under this Series B Capital Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Series B Capital Securities Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Series B Capital Securities Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any
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claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Series B Capital Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Series A
Capital Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Series B Capital Securities Guarantee may only be
amended with the prior approval of the Holders of a Majority in liquidation
amount of the Series B Capital Securities (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined).
The provisions of the Declaration with respect to consents to amendments
thereof (whether at a meeting or otherwise) shall apply to the giving of such
approval.
SECTION 9.3 Notices
All notices provided for in this Series B Capital Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustee at the Issuer's mailing address set forth below (or such other address
as the Issuer may give notice of to the Holders and the Capital Securities
Guarantee Trustee):
ML Capital Trust I
c/o ML Bancorp, Inc.
Two Aldwyn Center
Lancaster Avenue and Route 320
Villanova, Pennsylvania 19085
Attention: Brian M. Hartline
Administrative Trustee
Telecopy: (610) 526-6227
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(b) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders and the Issuer):
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5917
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders and the Capital Securities Guarantee Trustee):
ML Bancorp, Inc.
Two Aldwyn Center
Lancaster Avenue and Route 320
Villanova, Pennsylvania 19085
Attention: Brian M. Hartline
Executive Vice President,
Chief Financial Officer and Secretary
Telecopy: (610) 526-6227
(d) If given to any Holder of Series B Capital
Securities, at the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
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SECTION 9.4 Benefit
This Series B Capital Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not separately
transferable from the Series B Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed as of
the day and year first above written.
ML BANCORP, INC., as Guarantor
By:
----------------------------------------
Name: Brian M. Hartline
Title: Executive Vice President,
Chief Financial Officer
and Secretary
THE BANK OF NEW YORK, as Capital
Securities Guarantee Trustee
By:
----------------------------------------
Name:
Title:
20
<PAGE> 1
EXHIBIT 4.7
Registration Rights Agreement
<PAGE> 2
EXHIBIT 4.7
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated March 10, 1997
among
ML BANCORP, INC.
ML CAPITAL TRUST I
and
SANDLER O'NEILL & PARTNERS, L.P.
JANNEY MONTGOMERY SCOTT INC.
as Initial Purchasers
================================================================================
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made and entered into as of March 10, 1997 among ML BANCORP, INC., a
Pennsylvania corporation (the "Company"), ML CAPITAL TRUST I, a business trust
formed under the laws of the state of Delaware (the "Trust"), and SANDLER
O'NEILL & PARTNERS, L.P. ("Sandler O'Neill") and JANNEY MONTGOMERY SCOTT INC.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated March 4, 1997 (the "Purchase Agreement"), among the Company, as issuer of
the Series A 9.875% Junior Subordinated Deferrable Interest Debentures due
March 1, 2027 (the "Subordinated Debentures"), the Trust and the Initial
Purchasers, which provides for, among other things, the sale by the Trust to
the Initial Purchasers of 50,000 of the Trust's Series A 9.875% Capital
Securities, liquidation amount $1,000 per Capital Security (the "Capital
Securities"), the proceeds of which will be used by the Trust to purchase
Subordinated Debentures. The Capital Securities, together with the Subordinated
Debentures and the Company's guarantee of the Capital Securities (the "Capital
Securities Guarantee"), are collectively referred to as the "Securities". In
order to induce the Initial Purchasers to enter into the Purchase Agreement,
the Company and the Trust have agreed to provide to the Initial Purchasers and
their direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following
meanings:
"Additional Distributions" shall have the meaning set forth in
Section 2(e) hereof.
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in the City of New York or in Villanova,
Pennsylvania are authorized or required by law or executive order to close.
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<PAGE> 4
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust, dated as of March 10, 1997, by the trustees
named therein and the Company, as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust
to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the
Subordinated Debentures, the Series B 9.875% Junior Subordinated Deferrable
Interest Debentures due March 1, 2027 (the "Exchange Debentures") containing
terms substantially identical to the Subordinated Debentures (except that they
will not contain terms with respect to the transfer restrictions under the
Securities Act (other than requiring minimum transfers thereof to be in blocks
of $100,000 aggregate principal amount), and will not provide for any
Liquidated Damages thereon), (ii) with respect to the Capital Securities, the
Trust's Series B 9.875% Capital Securities, liquidation amount $1,000 per
Capital Security (the "Exchange Capital Securities") which will have terms
substantially identical to the
2
<PAGE> 5
Capital Securities (except they will not contain terms with respect to transfer
restrictions under the Securities Act (other than requiring minimum transfers
thereof to be in blocks of $100,000 aggregate liquidation amount), and will not
provide for any Additional Distributions thereon) and (iii) with respect to the
Capital Securities Guarantee, the Company's guarantee (the "Exchange Capital
Securities Guarantee") of the Exchange Capital Securities which will have terms
substantially identical to the Capital Securities Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as they own
any Registrable Securities, and each of their respective successors, assigns
and direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subordinated
Debentures and the Exchange Debentures dated as of March 10, 1997 between the
Company, as issuer, and The Bank of New York, as trustee, as the same may be
amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean March 10, 1997, the date of original
issuance of the Securities.
"Liquidated Damages" shall have the meaning set forth in Section
2(e) hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Regis-
tration Statement, including any preliminary prospectus, and any
3
<PAGE> 6
such prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registrable Securities" shall mean the Securities and, if issued,
the Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities or
Private Exchange Securities, as the case may be, shall have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act or are eligible to be sold without
restriction as contemplated by Rule 144(k), (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be outstanding or
(iv) with respect to the Securities, such Securities shall have been exchanged
for Exchange Securities upon consummation of the Exchange Offer and are
thereafter freely tradeable by the holder thereof (other than an affiliate of
the Company).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of one counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing,
4
<PAGE> 7
printing and distributing any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) the fees and
disbursements of counsel for the Company and of the independent certified
public accountants of the Company, including the expenses of any "cold comfort"
letters required by or incident to such performance and compliance, (vi) the
fees and expenses of the Trustee, and any exchange agent or custodian, (vii)
all fees and expenses incurred in connection with the listing, if any, of any
of the Exchange Securities or the Registrable Securities on any securities
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the Company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration statement of
the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Trust pursuant to the provisions of Section
2(b) hereof which covers all of the Regis- trable Securities or all of the
Private Exchange Securities, as the case may be, on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the
5
<PAGE> 8
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. Except as set forth in Section 2(b)
below, the Company and the Trust shall, for the benefit of the Holders, use
their reasonable best efforts to (i) cause to be filed with the SEC within 150
days after the Issue Date an Exchange Offer Registration Statement relating to
the Exchange Offer, (ii) cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the SEC not later than the date
which is 180 days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 calendar days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the Holders. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder eligible and electing to exchange Registrable Securities for a like
principal amount of Exchange Debentures or a like liquidation amount of
Exchange Capital Securities, together with the Exchange Guarantee, as
applicable (assuming that such Holder is not an affiliate of the Company within
the meaning of Rule 405 under the Securities Act and is not a broker-dealer
tendering Registrable Securities acquired directly from the Company for its own
account, acquires the Exchange Securities in the ordinary course of such
Holder's business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and under
state securities or blue sky laws (other than requiring minimum transfers in
blocks having an aggregate principal or liquidation amount, as the case may be,
of $100,000).
In connection with the Exchange Offer, the Company and
the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to
6
<PAGE> 9
the Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such Securities
exchanged;
(v) notify each Holder that any Security not tendered by such
Holder in the Exchange Offer will remain outstanding and continue to accrue
interest or accumulate distributions, as the case may be, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all material respects with all applicable
laws relating to the Exchange Offer.
If any Initial Purchaser determines upon advice of its
outside counsel that it is not eligible to participate in the Exchange Offer
with respect to the exchange of Securities constituting any portion of an
unsold allotment in the initial distribution, as soon as practicable upon
receipt by the Company and the Trust of a written request from such Initial
Purchaser, the Company and the Trust, as applicable, shall issue and deliver to
such Initial Purchaser in exchange (the "Private Exchange") for the Securities
held by such Initial Purchaser, a like liquidation amount of Capital Securities
of the Trust or, in the event the Trust is liquidated and Subordinated
Debentures are distributed, a like principal amount of the Subordinated
Debentures of the Company, together with the Exchange Guarantee, in each case
that are identical (except that such securities may bear a customary legend
with respect to restrictions on transfer pursuant to the Securities Act) to the
Exchange Securities (the "Private Exchange Securities") and which are issued
pursuant to the Indenture, the Declaration or the Guarantee (which provides
that the Exchange Securities will not be subject to the transfer restrictions
set forth in the Indenture or the Declaration, as applicable (other than
requiring minimum transfers thereof to be in blocks of $100,000 aggregate
principal amount or liquidation amount, as the case may be), and that the
Exchange Securities, the Private Exchange Securities and the Securities will
vote and consent together on all matters as one class and that none of the
Exchange Securities, the Private Exchange Securities or the Securities will
have the right to vote or consent as a separate class on any matter).
7
<PAGE> 10
The Private Exchange Securities shall be of the same series as the Exchange
Securities and the Company and the Trust will seek to cause the CUSIP Service
Bureau to issue the same CUSIP Numbers for the Private Exchange Securities as
for the Exchange Securities issued pursuant to the Exchange Offer. If requested
by the Company, each of the Initial Purchasers will, within a reasonable time
in advance of the Company's filing of an Exchange Offer Registration Statement
hereunder, advise the Company as to the number of Registrable Securities held
by it which constitute an unsold allotment in the initial distribution.
As soon as practicable after the close of the Exchange
Offer and, if applicable, the Private Exchange, the Company and the Trust, as
the case requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee
for cancellation all Securities or portions thereof so accepted for exchange by
the Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange Securities,
as applicable, equal in principal amount to the principal amount of the
Subordinated Debentures or equal in liquidation amount to the liquidation
amount of the Capital Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and
interest on each Exchange Debenture and Private Exchange Security issued
pursuant to the Exchange Offer and in the Private Exchange will accrue from the
last date on which a distribution or interest was paid on the Capital Security
or the Subordinated Debenture surrendered in exchange therefor or, if no
distribution or interest has been paid on such Capital Security or Subordinated
Debenture, from the Issue Date. To the extent not prohibited by any law or
applicable interpretations of the staff of the SEC, the Company and the Trust
shall use their reasonable best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC. Each Holder of Registrable
Securities who wishes to exchange such Registrable Securities for Exchange
Securities in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder
of Capital
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<PAGE> 11
Securities, representations that (i) it is not an affiliate of the Trust or the
Company, (ii) the Exchange Securities to be received by it were acquired in the
ordinary course of its business and (iii) at the time of the Exchange Offer, it
has no arrangement with any person to participate in the distribution (within
the meaning of the Securities Act) of the Exchange Capital Securities. The
Company and the Trust shall inform the Initial Purchasers, after consultation
with the applicable Trustees, of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance
with this Section 2(a), the provisions of this Agreement shall continue to
apply, mutatis mutandis, solely with respect to Registrable Securities that are
Private Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further obligation
to register the Registrable Securities (other than Private Exchange Securities)
held by any Holder pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the
Company, the Trust or the Majority Holders reasonably determine, after
conferring with counsel, that the Exchange Offer Registration provided in
Section 2(a) above is not available under applicable laws and regulations and
currently prevailing interpretations of the staff of the SEC, (ii) the Company
shall determine in good faith that there is a reasonable likelihood that, or
that a material uncertainty exists as to whether, consummation of the Exchange
Offer would result in (x) the Trust becoming subject to federal income tax with
respect to income received or accrued on the Subordinated Debentures or the
Exchange Debentures (collectively, the "Debentures"), (y) interest payable by
the Company on the Debentures not being deductible by the Company for United
States federal income tax purposes or (z) the Trust becoming subject to more
than a de minimus amount of other taxes, duties or governmental charges, (iii)
the Exchange Offer Registration Statement is not declared effective within 180
days of the Issue Date or (iv) upon the request of any Initial Purchaser with
respect to any Regis- trable Securities held by it, if such Initial Purchaser
is not permitted, in the opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
pursuant to applicable law or applicable interpretations of the staff of the
SEC, to participate in the Exchange Offer and thereby receive securities that
are freely tradeable without restriction under the Securities Act and
applicable blue sky or state securities laws (any of the events specified in
(i)-(iv) being a "Shelf Registration Event" and the date of occurrence thereof,
the "Shelf Registration Event Date"), then in addition to or in lieu of
conducting the Exchange Offer contemplated by Section 2(a), as the case may be,
the Company and the Trust shall use their reasonable best efforts to cause to
be filed as promptly as practi-
9
<PAGE> 12
cable after such Shelf Registration Event Date, as the case may be, and, in any
event, within 45 days after such Shelf Registration Event Date (provided that
in no event shall such date be earlier than 75 days after the Issue Date), a
Shelf Registration Statement providing for the sale by the Holders of all of
the Registrable Securities, and shall use its reasonable best efforts to have
such Shelf Registration Statement declared effective by the SEC as soon as
practicable. No Holder of Registrable Securities shall be entitled to include
any of its Registrable Securities in any Shelf Registration pursuant to this
Agreement unless and until such Holder agrees in writing to be bound by all of
the provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use their reasonable
best efforts to keep the Shelf Registration Statement continuously effective
and usable for resales for (a) the Rule 144(k) Period in the case of a Shelf
Registration Statement filed pursuant to Section 2(b)(i), (ii) or (iii) or (b)
180 days in the case of a Shelf Registration Statement filed pursuant to
Section 2(b)(iv) (subject in each case to extension pursuant to the last
paragraph of Section 3 hereof), or for such shorter period which will terminate
when all of the Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or cease
to be outstanding (the "Effectiveness Period"). The Company and the Trust shall
not permit any securities other than Registrable Securities to be included in
the Shelf Registration. The Company and the Trust will, in the event a Shelf
Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement and notify each such Holder when the Shelf Registration
has become effective. The Company and the Trust further agree, if necessary, to
supplement or amend the Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registrations, and the
Company and the Trust agree to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being used or
filed with the SEC.
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<PAGE> 13
(c) Expenses. The Company, as issuer of the Subordi-
nated Debentures, shall pay all Registration Expenses in connection with any
Registration Statement filed pursuant to Section 2(a) and/or 2(b) hereof and
will reimburse the Initial Purchasers for the reasonable fees and disbursements
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial
Purchasers, incurred in connection with the Exchange Offer and, if applicable,
the Private Exchange, or any one other counsel designated in writing by the
Majority Holders to act as counsel for the Holders of the Regis- trable
Securities in connection with a Shelf Registration Statement, which other
counsel shall be reasonably satisfactory to the Company. Except as provided
herein, each Holder shall pay all expenses of its counsel and any of its other
advisors or experts, underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that if, after it has been declared effective, the offering of Registrable
Securities pursuant to such Exchange Offer Registration Statement or Shelf
Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have been effective
during the period of such interference, until the offering of Registrable
Securities pursuant to such Registration Statement may legally resume. The
Company and the Trust will be deemed not to have used their reasonable best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
that would result in the Holders of Registrable Securities covered thereby not
being able to exchange or offer and sell such Registrable Securities during
that period unless such action is required by applicable laws and regulations
or currently prevailing interpretations of the staff of the SEC.
(e) Liquidated Damages. In the event that (i) neither
the Exchange Offer Registration Statement is filed with the SEC on or prior to
the 150th day after the Issue Date nor a Shelf Registration Statement is filed
with the SEC on or prior to the 45th day after the Shelf Registration Event
Date in respect of a Shelf Registration Event attributable to any of the events
set forth in Sections 2(b)(i), (ii) and (iii) (provided that in no event shall
such date be earlier than 75 days after the Issue Date), then commencing on the
day after the applicable required filing date, liquidated damages ("Liquidated
Damages") shall accrue on the principal amount of the Subordinated Debentures,
and
11
<PAGE> 14
additional distributions ("Additional Distributions") shall accumulate on the
liquidation amount of the Trust Securities (as such term is defined in the
Declaration), each at a rate of .25% per annum; or
(ii) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the
180th day after the Issue Date (in the case of an Exchange Offer Registration
Statement) or on or prior to the later of (A) the 30th day after the date such
Shelf Registration Statement was required to be filed and (B) the 180th date
after the Issue Date (in the case of a Shelf Registration Statement in respect
of a Shelf Registration Event attributable to any of the events set forth in
Sections 2(b)(i), (ii) and (iii)), then, commencing on the 181st day after the
Issue Date (in the case of an Exchange Offer Registration Statement) or the
later of (A) the 31st day after the date such Shelf Registration Statement was
required to be filed and (B) the 181st day after the Issue Date (in the case of
a Shelf Registration Statement in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii)), Liquidated Damages shall accrue on the principal amount of the
Subordinated Debentures, and Additional Distributions shall accumulate on the
liquidation amount of the Trust Securities, each at a rate of .25% per annum;
or
(iii) (A) the Trust has not exchanged Exchange Capital Securities or
the Company has not exchanged Exchange Guarantees or Exchange Subordinated
Debenture for all Capital Securities, Guarantees or Subordinated Debentures, as
the case may be, validly tendered, in accordance with the terms of the Exchange
Offer on or prior to the 45th day after the date on which the Exchange Offer
Registration Statement was declared effective or (B) if applicable, the Shelf
Registration Statement in respect of a Shelf Registration Event attributable to
any of the events set forth in Sections 2(b)(i), (ii) and (iii) has been
declared effective and such Shelf Registration Statement ceases to be effective
or usable for resales (whether as a result of an event contemplated by Section
3(e) or otherwise) at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities), then Liquidated
Damages shall accrue on the principal amount of Subordinated Debentures, and
Additional Distributions shall accumulate on the liquidation amount of the
Trust Securities, each at a rate of .25% per annum commencing on (x) the 46th
day after such effective date, in the case of (A) above, or (y) the day such
Shelf Registration Statement ceases to be effective or usable for resales in
the case of (B) above;
provided, however, that neither the Liquidated Damages rate on the Subordinated
Debentures, nor the Additional Distribution rate on the liquidation amount of
the Trust Securities, may exceed in the aggregate .25% per annum; provided,
further, however, that (1) upon
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<PAGE> 15
the filing of the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of the
Exchange Offer Registration Statement or a Shelf Registration Statement (in the
case of clause (ii) above), or (3) upon the exchange of Exchange Capital
Securities, Exchange Guarantees and Exchange Debentures for all Capital
Securities, Guarantees and Subordinated Debentures tendered (in the case of
clause (iii)(A) above), or at such time as the Shelf Registration Statement
which had ceased to remain effective or usable for resales again becomes
effective and usable for resales (in the case of clause (iii)(B) above),
Liquidated Damages on the principal amount of the Subordinated Debentures and
Additional Distributions on the liquidation amount of the Trust Securities as a
result of such clause (or the relevant subclause thereof) shall cease to accrue
and accumulate.
Any amounts of Liquidated Damages and Additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above will be payable in cash on the
next succeeding March 1 and September 1, as the case may be, to Holders on the
relevant record dates for the payment of interest and distributions pursuant to
the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company and the Trust acknowledge that any
failure by the Company or the Trust to comply with its obligations under
Section 2(a) and Section 2(b) hereof may result in material irreparable injury
to the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any Holder may obtain such relief as may be required
to specifically enforce the Company's and the Trust's obligations under Section
2(a) and Section 2(b) hereof.
(g) Distribution of Subordinated Debentures. Notwith-
standing any other provisions of this Agreement, in the event that Subordinated
Debentures are distributed to holders of Capital Securities in liquidation of
the Trust pursuant to the Declaration, (i) all references in this Section 2 and
in Section 3 to Securities, Registrable Securities and Exchange Securities
shall not include the Capital Securities and Capital Securities Guarantee or
Exchange Capital Securities and Exchange Capital Securities Guarantee issued or
to be issued in exchange therefor in the Exchange Offer and (ii) all
requirements for action to be taken by the Trust in this Section 2 and in
Section 3 shall cease to apply and all requirements for action to be taken by
the Company in this Section 2 and in Section 3 shall apply to the Subordinated
Debentures and Exchange Debentures issued or to be issued in exchange therefor
in the Exchange Offer.
3. Registration Procedures. In connection with the
obligations of the Company and the Trust with respect to the Regis-
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<PAGE> 16
tration Statements pursuant to Sections 2(a) and 2(b) hereof, each of the
Company and the Trust shall:
(a) prepare and file with the SEC a Registration Statement
or Registration Statements as prescribed by Sections 2(a) and 2(b)
hereof within the relevant time period specified in Section 2 hereof
on the appropriate form under the Securities Act, which form (i)
shall be selected by the Company and the Trust, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the
Registrable Securities by the selling Holders thereof and, in the
case of an Exchange Offer, be available for the exchange of
Registrable Securities, and (iii) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective (and, in the case
of a Shelf Registration Statement, usable for resales) in accordance
with Section 2 hereof; provided, however, that if (1) such filing is
pursuant to Section 2(b), or (2) a Prospectus contained in an
Exchange Offer Registration Statement filed pursuant to Section 2(a)
is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities,
before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company and the Trust shall
furnish to and afford the Holders of the Registrable Securities and
each such Participating Broker-Dealer, as the case may be, covered
by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of
all such documents proposed to be filed. The Company and the Trust
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of
such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be;
and cause each Prospectus to be supplemented, if so determined by
the Company or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the
Securities Act, and comply with the provisions of the Securities
Act, the Exchange Act and the rules and regulations promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by each Registration Statement during the
Effective-
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<PAGE> 17
ness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by
the selling Holders thereof described in this Agreement (including
sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a
Shelf Registration Statement with respect to the Registrable
Securities is being filed and advising such Holder that the
distribution of Registrable Securities will be made in accordance
with the method selected by the Majority Holders; and (ii) furnish
to each Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an underwritten
offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable
Securities; and (iii) consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Registrable Securities included in the Shelf Registration Statement
in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto;
(d) in the case of a Shelf Registration, use its
reasonable best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws
of such jurisdictions by the time the applicable Registration
Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities
shall reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder and
underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided,
however, that the Company and the Trust shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (ii) file any general consent to service of
process in any jurisdiction where it would not otherwise be subject
to such service of process or (iii) subject itself to taxation in
any such jurisdiction if it is not then so subject;
(e) (1) in the case of a Shelf Registration or (2) if
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be
15
<PAGE> 18
utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof are
seeking to sell Exchange Securities and are required to deliver
Prospectuses, notify each Holder of Registrable Securities, or such
Participating Broker-Dealers, as the case may be, their counsel and
the managing underwriters, if any, promptly and promptly confirm
such notice in writing (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any
state securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or
the qualification of the Registrable Securities or the Exchange
Securities to be offered or sold by any Participating Broker-Dealer
in any jurisdiction described in paragraph 3(d) hereof or the
initiation of any proceedings for that purpose, (iv) in the case of
a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of
the Company and the Trust contained in any purchase agreement,
securities sales agreement or other similar agreement, if any cease
to be true and correct in all material respects, and (v) of the
happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the Effectiveness
Period, which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect
or which causes such Registration Statement or Prospectus to omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (vi) the Company and the Trust's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of
such Shelf Registration Statement, without charge, one conformed
copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate with
the selling Holders of Registrable Securities to facilitate
16
<PAGE> 19
the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends (other than with respect to restrictions requiring minimum
transfers in blocks having an aggregate principal or liquidation
amount, as the case may be, of $100,000) and in such denominations
(consistent with the provisions of the Indenture and the
Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days
prior to the closing of any sale of Registrable Securities pursuant
to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange
Offer Registration, upon the occurrence of any circumstance
contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi)
hereof, use its reasonable best efforts to prepare a supplement or
post-effective amendment to such Registration Statement or the
related Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;
(j) obtain a CUSIP number for all Exchange Capital
Securities and the Capital Securities (and if the Trust has made a
distribution of the Subordinated Debentures to the Holders of the
Capital Securities, the Subordinated Debentures or the Exchange
Debentures), as the case may be, not later than the effective date
of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities or the Registrable
Securities, as the case may be, in a form eligible for deposit with
the Depositary;
(k) cause the Indenture, the Declaration, the Guarantee
and the Exchange Guarantee to be qualified under the Trust Indenture
Act of 1939 (the "TIA") in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be,
and effect such changes to such documents as may be required for
them to be so qualified in accordance with the terms of the TIA and
execute, and use its reasonable best efforts to cause the relevant
trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with
the SEC to enable such documents to be so qualified in a timely
manner;
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<PAGE> 20
(l) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions
in connection therewith as are reasonably requested by the holders
of at least 25% in aggregate principal or liquidation amount, as the
case may be, of the Regis- trable Securities in order to expedite or
facilitate the registration or the disposition of the Registrable
Securities; provided, that the Company and the Trust shall not be
required to enter into any such agreement more than twice with
respect to all of the Registrable Securities and may delay entering
into such agreement until the consummation of any underwritten
public offering which the Company shall have undertaken;
(m) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x)
any Initial Purchaser, in the case where such Initial Purchaser
holds Securities acquired by it as part of its initial allotment and
(y) Holders of at least 25% in aggregate principal or liquidation
amount, as the case may be, of the Registrable Securities covered
thereby: (i) make such representations and warranties to Holders of
the Registrable Securities and the underwriters (if any) with
respect to the business of the Trust, the Company and its
subsidiaries as then conducted and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily
made by issuers of debt securities to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and the Trust and updates thereof
(which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters (if
any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder
and the underwriters (if any) covering the matters customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such underwriters
(it being agreed that the matters to be covered by such opinion may
be subject to customary qualifications and exceptions); (iii) obtain
"cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the
independent certified public accountants of the Company and the
Trust (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company and the Trust or of any
business acquired by the Company and the Trust for which financial
statements and financial data are, or are required to be, included
in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
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<PAGE> 21
connection with underwritten offerings and such other matters as
reasonably requested by such underwriters in accordance with
Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, provide indemnification pursuant to
indemnification provisions and procedures no less favorable than
those set forth in Section 4 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate
principal amount or liquidation amount, as the case may be, of
Registrable Securities covered by such Registration Statement and
the managing underwriters and agents) with respect to all parties to
be indemnified pursuant to said Section (including, without
limitation, such underwriters and selling Holders). The above shall
be done at each closing under such underwriting agreement, or as and
to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to
Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to
be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, make reasonably available for inspection by any
selling Holder of such Registrable Securities or Participating
Broker-Dealer, as applicable, who certifies to the Company and the
Trust that it has a current intention to sell Registrable Securities
pursuant to the Shelf Registration, any underwriter participating in
any such disposition of Registrable Securities, if any, and any
attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be,
or underwriter (collectively, the "Inspectors"), at the offices
where normally kept, during the Company's normal business hours, all
financial and other records, pertinent corporate documents and
properties of the Trust, the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Trust, the Company and its subsidiaries to supply all relevant
information in each case reasonably requested by any such Inspector
in connection with such Registration Statement. Records which the
Company and the Trust determine, in good faith, to be confidential
and any records which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii)
subject to the last sentence of this Section 3(n), the release of
such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or is necessary in connection with
any action, suit or proceeding or (iii) the information in such
Records has been made generally available to the public (other
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<PAGE> 22
than by an Inspector or a selling Holder in breach of its
obligations hereunder). Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be
required to agree in writing that information obtained by it as a
result of such inspections shall be deemed confidential and shall
not be used by it as the basis for any market transactions in the
securities of the Trust or the Company unless and until such is made
generally available to the public through no fault of an Inspector
or a Selling Holder. Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be
required to further agree in writing that it will, upon learning
that disclosure of such Records is sought in a court of competent
jurisdiction or in connection with any action, suit or proceeding,
give notice to the Company and allow the Company at its expense to
undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(o) comply in all material respects with all applicable
rules and regulations of the SEC so long as any provision of this
Agreement shall be applicable and make generally available to its
securityholders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any
similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 90 days after the end
of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Company addressed to the Trustee for the benefit of all Holders
of Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, to the effect that (i) the
Company and the Trust, as the case requires, has duly authorized,
executed and delivered the Exchange Securities and Private Exchange
Securities, and (ii) each of the Exchange Securities or the Private
Exchange Securities, as the case may be, constitutes a legal, valid
and binding obligation of the Company or the Trust, as the case
requires, enforceable against the Company or the Trust, as the case
requires, in accordance with its respective terms (in each case,
with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by
20
<PAGE> 23
Holders to the Company or the Trust, as applicable (or to such other
Person as directed by the Company or the Trust, respectively), in
exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be, the Company or the Trust, as
applicable, shall mark, or cause to be marked, on such Registrable
Securities delivered by such Holders that such Registrable
Securities are being cancelled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be;
in no event shall such Registrable Securities be marked as paid or
otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to
be made with the NASD;
(s) use its reasonable best efforts to take all other
steps necessary to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to the Initial Purchasers or another
representative of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter"
status of any broker-dealer (a "Participating Broker-Dealer") that
holds Registrable Securities acquired for its own account as a
result of market-making activities or other trading activities and
that will be the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or
policies have been publicly disseminated by the staff of the SEC or
such positions or policies, in the reasonable judgment of the
Initial Purchasers or such other representative, represent the
prevailing views of the staff of the SEC, including a statement that
any such Participating Broker-Dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the Securities Act in connection with
any resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the
notice referred to in Section 3(e), without charge, as many copies
of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment
or supplement thereto, as such Participating Broker-Dealer may
reasonably request (each of the Company and
21
<PAGE> 24
the Trust hereby consents to the use of the Prospectus forming part
of the Exchange Offer Registration Statement or any amendment or
supplement thereto by any Person subject to the prospectus delivery
requirements of the Securities Act, including all Participating
Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or
supplement thereto), (iii) use its reasonable best efforts to keep
the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such
period of time as such Persons must comply with such requirements
under the Securities Act and applicable rules and regulations in
order to resell the Exchange Securities; provided, however, that
such period shall not be required to exceed 90 days (or such longer
period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the
transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x)
the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a
Prospectus in connection with the exchange of Registrable
Securities, the broker-dealer will not be deemed to admit that it is
an underwriter within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company and the Trust agree to deliver to the Initial
Purchasers or to another representative of the Participating
Broker-Dealers, if requested by any Initial Purchaser or such other
representative of Participating Broker-Dealers, who hold at least
10% aggregate principal or liquidation amount, as the case may be,
of the Registrable Securities covered by the Exchange Offer
Registration Statement on behalf of the Participating Broker-Dealers
upon consummation of the Exchange Offer (i) an opinion of counsel in
form and substance reasonably satisfactory to the Initial Purchasers
or such other representative of the Participating Broker-Dealers,
22
<PAGE> 25
covering the matters customarily covered in opinions requested in
connection with Exchange Offer Registration Statements and such
other matters as may be reasonably requested (it being agreed that
the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officers'
certificate containing certifications substantially similar to those
set forth in Section 5(f) of the Purchase Agreement and such
additional certifications as are customarily delivered in a public
offering of debt securities and (iii) as well as upon the
effectiveness of the Exchange Offer Registration Statement, a
comfort letter, in each case, in customary form if permitted by
Statement on Auditing Standards No. 72.
The Company or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to
furnish to the Company or the Trust, as applicable, such information regarding
such seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who fails to furnish such
information within a reasonable time after receiving such request. The Company
shall have no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
In the case of a Shelf Registration Statement, or if
Participating Broker-Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof are seeking to sell
Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"Advice") by the Company and the Trust that the use of the applicable
Prospectus may be resumed, and, if so directed by the Company and the Trust,
such Holder will deliver to the Company or the Trust (at the Company's or the
Trust's expense, as the case requires) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities or Exchange Securities, as the
case may be, current at the time of receipt of such notice. If the Company or
the Trust shall give any such notice to suspend the disposition of Registrable
Securities or Exchange Securities, as the case may be, pursuant to a
Registration Statement, the Company and the Trust shall use their reasonable
best efforts to file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to the Registra-
23
<PAGE> 26
tion Statement and shall extend the period during which such Registration
Statement is required to be maintained effective and usable for resales
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date when
the Company and the Trust shall have made available to the Holders (x) copies
of the supplemented or amended Prospectus necessary to resume such dispositions
or (y) the Advice.
4. Indemnification and Contribution. (a) In connec-
tion with any Registration Statement, the Company and the Trust shall, jointly
and severally, indemnify and hold harmless the Initial Purchasers, each Holder,
each underwriter who participates in an offering of the Registrable Securities,
each Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees
and agents, as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred,
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any
amendment thereto) covering Registrable Securities or Exchange
Securities, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained
in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any court or governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected
with the prior written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel
chosen by such Holder, such Participating Broker-Dealer, or any
underwriter (except to the extent otherwise expressly provided in
Section 4(c) hereof)), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any court or
24
<PAGE> 27
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of this
Section 4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in a Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person,
with respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such
loss, liability, claim, damage or expense of any Holder, Participating
Broker-Dealer, any underwriter or controlling person results from the fact that
such Holder, any underwriter or Participating Broker-Dealer sold Securities to
a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to such
Holder, underwriter or Participating Broker-Dealer and the loss, liability,
claim, damage or expense of such Holder, underwriter, Participating
Broker-Dealer or controlling person results from an untrue statement or
omission of a material fact contained in the preliminary Prospectus which was
corrected in the final Prospectus. Any amounts advanced by the Company or the
Trust to an indemnified party pursuant to this Section 4 as a result of such
losses shall be returned to the Company or the Trust if it shall be finally
determined by such a court in a judgment not subject to appeal or final review
that such indemnified party was not entitled to indemnification by the Company
or the Trust.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Trust, any underwriter and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company and the Trust who signed the
Registration Statement), employees and agents and each Person, if any, who
controls the Company, the Trust, any underwriter or any other selling Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in a Registration Statement (or
any amendment thereto) or any
25
<PAGE> 28
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company or the Trust by
such selling Holder with respect to such Holder expressly for use in such
Registration Statement (or any amendment thereto), or any such Prospectus (or
any amendment or supplement thereto); provided, however, that, in the case of a
Shelf Registration Statement, no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have under this Section 4, except to the extent that it is materially
prejudiced by such failure. An indemnifying party may participate at its own
expense in the defense of such action, or, if it so elects within a reasonable
time after receipt of such notice, assume the defense of any suit brought to
enforce any such claim; but if it so elects to assume the defense, such defense
shall be conducted by counsel chosen by it and approved by the idemnified party
or parties, which approval shall not be unreasonably withheld. In the event
that an indemnifying party elects to assume the defense of any such suit and
retain such counsel, the indemnified party or parties shall bear the fees and
expenses of any additional counsel thereafter retained by such indemnified
party or parties; provided, however, that the indemnified party or parties
shall have the right to employ counsel (in addition to local counsel) to
represent the indemnified party or parties who may be subject to liability
arising out of any action in respect of which indemnity may be sought against
the indemnifying party if, in the reasonable judgment of counsel for the
indemnified party or parties, there may be legal defenses available to such
indemnified party or parties which are different from or in addition to those
available to the indemnifying party, in which event the fees and expenses of
appropriate separate counsel shall be borne by the indemnifying party. In no
event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to local counsel), separate from its own
counsel, for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether
or not the indemnified parties are actual or potential parties thereto),
26
<PAGE> 29
unless such settlement, compromise or consent (i) includes an unconditional
written release in form and substance satisfactory to the indemnified parties
of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) In order to provide for just and equitable contri-
bution in circumstances under which any of the indemnity provisions set forth
in this Section 4 is for any reason held to be unavailable to the indemnified
parties although applicable in accordance with its terms, the Company, the
Trust and the Holders shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company, the Trust and the Holders, as incurred;
provided that no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any Person that was not guilty of such fraudulent misrepresentation. As
between the Company, the Trust and the Holders, such parties shall contribute
to such aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company and Trust, on the one
hand, and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company and the Trust, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust, on the one hand,
or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Trust and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 4, each
affiliate of a Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Holder, and each director of each of the Company
or the Trust, each officer of each of the Company or the Trust who signed the
Registration Statement, and each Person, if any, who controls each of the
Company and the Trust within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
each of the Company or the Trust.
27
<PAGE> 30
5. Participation in an Underwritten Registration. No
Holder may participate in an underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in the underwriting arrangement approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably required under the
terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Regis-
trable Securities covered by the Shelf Registration Statement who desire to do
so may sell the securities covered by such Shelf Registration in an
underwritten offering, subject to the provisions of Section 3(l) hereof. In any
such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount or liquidation amount, as applicable, of
the Registrable Securities included in such offering; provided, however, that
such underwriters and managers must be reasonably satisfactory to the Company
and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company
or the Trust is subject to the reporting requirements of Section 13 or 15 of
the Exchange Act and any Registrable Securities remain outstanding, each of the
Company and the Trust, as the case may be, will use its reasonable best efforts
to file the reports required to be filed by it under the Securities Act and
Section 13(a) or 15(d) of the Exchange Act and the rules and regulations
adopted by the SEC thereunder, provided, that if it ceases to be so required to
file such reports, it will, upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales of its securities pursuant to Rule 144 under the Securities Act,
(b) deliver such information to a prospective purchaser as is necessary to
permit sales of its securities pursuant to Rule 144A under the Securities Act,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company and the Trust will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(b) No Inconsistent Agreements. The Company or the
Trust has not entered into nor will the Company or the Trust on or
28
<PAGE> 31
after the date of this Agreement enter into any agreement which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or the
Trust's other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company and the Trust has
obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure; provided no
amendment, modification or supplement or waiver or consent to the departure
with respect to the provisions of Section 4 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing by
such Holder of Registrable Securities. Notwithstanding the foregoing sentence,
(i) this Agreement may be amended, without the consent of any Holder of
Registrable Securities, by written agreement signed by the Company, the Trust
and Sandler O'Neill, to cure any ambiguity, correct or supplement any provision
of this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company, the Trust and Sandler
O'Neill to the extent that any such amendment, modification, supplement, waiver
or consent is, in their reasonable judgment, necessary or appropriate to comply
with applicable law (including any interpretation of the Staff of the SEC) or
any change therein and (iii) to the extent any provision of this Agreement
relates to any Initial Purchaser, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may be
given, by written agreement signed by or on behalf of each such Initial
Purchaser, the Company and the Trust. Each Holder of any Registrable Securities
then outstanding shall be bound by any amendment or waiver effected pursuant to
this Section 7(c), whether or not any notice, writing or marking indicating
such amendment or waiver appears on such Registrable Securities or is delivered
to such Holder.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company or the Trust by means of a notice given in
accordance with the provisions
29
<PAGE> 32
of this Section 7(d), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communi-
cations shall be concurrently delivered by the Person giving the same to the
Trustee, at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors, assigns and transferees
of the Initial Purchasers, including, without limitation and without the need
for an express assignment, subsequent Holders; provided, however, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the Purchase Agreement
or the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be entitled
to receive the benefits hereof.
(f) Entire Agreement. This Agreement, the other
writings referred to herein (including the Declaration, the Capital Securities
Guarantee and the Indenture) and the Liquidated Damages Agreement among the
parties hereto of even date contain the entire understandings among the parties
with respect to its subject matter. This Agreement supersedes all prior
agreements and understandings among the parties with respect to its subject
matter.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
30
<PAGE> 33
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF
THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(j) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Securities Held by the Company, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
31
<PAGE> 34
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
ML BANCORP, INC.
By: [SIG]
-----------------------------------
Name:
Title:
ML CAPITAL TRUST I
By: [SIG]
------------------------------------
Name:
Title:
By: [SIG]
------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above
written:
SANDLER O'NEILL & PARTNERS, L.P.
JANNEY MONTGOMERY SCOTT INC.
By: SANDLER O'NEILL & PARTNERS, L.P.,
as Representative of the several
Initial Purchasers
By: SANDLER O'NEILL & PARTNERS CORP.,
the sole general partner
By: /s/ CATHERINE A. LAWTON
-----------------------------
Name: Catherine A. Lawton
Title: Vice President
<PAGE> 1
EXHIBIT 12.1
Computation of ratio earnings to fixed charges
(excluding interest on deposits)
<PAGE> 2
EXHIBIT 12.1
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Excluding Interest on Deposits)
The Corporation's ratios of earnings to fixed charges (excluding
interest on deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ----------- --------- ---------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Net income . . . . . . . . . . . $ 13,810 $ 11,620 $ 8,694 $ 1,862 $ 7,488
Extraordinary items, net of tax . 0 0 0 0 0
Cumulative effect of changes in
accounting for income taxes . . 0 0 0 0 1,967
Income tax expense . . . . . . . 1,905 6,272 4,974 7,461 3,267
------- ------- ------- ------ ------
Pretax earnings . . . . . . . . $ 15,715 $ 17,892 $ 13,668 $ 9,323 $ 8,788
======= ======= ======= ====== ======
Fixed charges:
Portion of rental expense which
approximates the interest factor $ 128 $ (433) $ (411) $ (388) $ (341)
Interest on borrowed funds . . . 19,515 16,552 10,105 4,765 4,372
------- ------- ------- ------- ------
Total fixed charges . . . . . . $ 19,643 $ 16,119 $ 9,694 $ 4,377 $ 4,031
======= ======= ======= ======= ======
Earnings (for ratio calculation) $ 35,358 $ 34,011 $ 23,362 $ 13,700 12,819
======= ======= ======= ======= ======
Ratio of earnings to fixed charges 1.80 2.11 2.41 3.13 3.18
==== ==== ==== ==== ====
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent income (loss) before extraordinary items and
cumulative effect of a change in accounting principle plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
include gross interest expense (other than on deposits) and the portion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including gross interest on deposits, include all
interest expense and the portion deemed representative of the interest factor
of rent expense, net of income from subleases.
<PAGE> 1
EXHIBIT 12.2
Computation of ratio of earnings to fixed changes
(including interest on deposits)
<PAGE> 2
EXHIBIT 12.2
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Including Interest on Deposits)
The Corporation's ratios of earnings to fixed charges (including
interest on deposits) for the periods indicated were as follows:
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ----------- --------- ---------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Net income . . . . . . . . . . . . . $ 13,810 $ 11,620 $ 8,694 $ 1,862 $ 7,488
Extraordinary items, net of tax . . . 0 0 0 0 0
Cumulative effect of changes in
accounting for income taxes . . . . 0 0 0 0 1,967
Income tax expense . . . . . . . . . 1,905 6,272 4,974 7,461 3,267
------- ------- ------- ------ -------
Pretax earnings . . . . . . . . . . $ 15,715 $ 17,892 $ 13,668 $ 9,323 $ 8,788
======= ======= ======= ====== =======
Fixed charges:
Portion of rental expense which
approximates the interest factor . . $ 128 $ (433) $ (411) $ (388) $ (341)
Interest on deposits . . . . . . . . 63,709 61,674 42,877 34,471 42,221
Interest on borrowed funds . . . . . 19,515 16,552 10,105 4,765 4,372
------- ------- ------- ------- -------
Total fixed charges . . . . . . . . $ 83,352 $ 77,793 $ 52,571 $ 38,848 $ 41,252
======= ======= ======= ======= =======
Earnings (for ratio calculation) . . $ 99,067 $ 95,685 $ 66,239 $ 48,171 55,040
======= ======= ======= ======= =======
Ratio of earnings to fixed charges . 1.19 1.23 1.26 1.24 1.19
===== ==== ==== ==== ====
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represent income (loss) before extraordinary items and
cumulative effect of a change in accounting principle plus applicable income
taxes and fixed charges. Fixed charges, excluding interest on deposits,
include gross interest expense (other than on deposits) and the portion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including gross interest on deposits, include all
interest expense and the portion deemed representative of the interest factor
of rent expense, net of income from subleases.
<PAGE> 1
EXHIBIT 23.1
Consent of KPMG Peak Marwick LLP
<PAGE> 2
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
ML Bancorp, Inc.:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the Registration
Statement.
KPMG Peat Marwick LLP
July 8, 1997
<PAGE> 1
EXHIBIT 25.1
Form T-1 Statement of Eligibility of The Bank
of New York to act as trustee under the Indenture
<PAGE> 2
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------------------
ML BANCORP, INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2752439
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Aldwyn Center
Lancaster Avenue & Route 320
Villanova, Pennsylvania 19085
(Address of principal executive offices) (Zip code)
----------------------------------
Series B Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE> 3
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO
THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Name Address
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT
OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to
Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
-2-
<PAGE> 4
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining
authority.
-3-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of the State
of New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 7th day of July, 1997.
THE BANK OF NEW YORK
By: /S/THOMAS E. TABOR
--------------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
-4-
<PAGE> 6
EXHIBIT 7
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 6,024,605
Interest-bearing balances .......... 808,821
Securities:
Held-to-maturity securities ........ 1,071,747
Available-for-sale securities ...... 3,105,207
Federal funds sold in domestic offices
of the bank: ....................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................31,962,915
LESS: Allowance for loan and
lease losses ..............635,084
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ...... 1,539,612
Premises and fixed assets (including
capitalized leases) ................ 692,317
Other real estate owned .............. 22,123
Investments in unconsolidated
subsidiaries and associated
companies .......................... 213,512
Customers' liability to this bank on
acceptances outstanding ............ 985,297
Intangible assets .................... 590,973
Other assets ......................... 1,487,903
-----------
Total assets ......................... $52,120,460
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,929,642
Noninterest-bearing ......11,245,050
Interest-bearing .........14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,852,809
Noninterest-bearing .........552,203
Interest-bearing .........12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the
bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,360,877
Securities sold under agreements
to repurchase..................... 226,158
Demand notes issued to the U.S.
Treasury ........................... 204,987
Trading liabilities .................. 1,437,445
Other borrowed money:
With original maturity of one year
or less .......................... 2,312,556
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,014,717
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,721,291
-----------
Total liabilities .................... 48,095,648
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 7,030
Cumulative foreign currency transla-
tion adjustments .................. ( 9,916)
-----------
Total equity capital ................ 4,024,812
-----------
Total liabilities and equity
capital ........................... $52,120,460
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my knowledge
and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
- -------------------------------------------------------------------------------
<PAGE> 7
<PAGE> 1
EXHIBIT 25.2
Form T-1 Statement of Eligibility of
The Bank of New York to act as trustee under
the Declaration of Trust of ML Capital Trust
<PAGE> 2
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------------
ML CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Aldwyn Center
Lancaster Avenue & Route 320
Villanova, Pennsylvania 19085
(Address of principal executive offices) (Zip code)
-----------------------
Series B Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE> 3
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO
THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7a-29 UNDER THE TRUST INDENTURE ACT
OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to
Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
-2-
<PAGE> 4
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining
authority.
-3-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of the State
of New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 7th day of July, 1997.
THE BANK OF NEW YORK
By: /S/THOMAS E. TABOR
----------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
-4-
<PAGE> 6
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 6,024,605
Interest-bearing balances .......... 808,821
Securities:
Held-to-maturity securities ........ 1,071,747
Available-for-sale securities ...... 3,105,207
Federal funds sold in domestic offices
of the bank: ....................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................31,962,915
LESS: Allowance for loan and
lease losses ..............635,084
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ...... 1,539,612
Premises and fixed assets (including
capitalized leases) ................ 692,317
Other real estate owned .............. 22,123
Investments in unconsolidated
subsidiaries and associated
companies .......................... 213,512
Customers' liability to this bank on
acceptances outstanding ............ 985,297
Intangible assets .................... 590,973
Other assets ......................... 1,487,903
-----------
Total assets ......................... $52,120,460
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,929,642
Noninterest-bearing ......11,245,050
Interest-bearing .........14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,852,809
Noninterest-bearing .........552,203
Interest-bearing .........12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the
bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,360,877
Securities sold under agreements
to repurchase..................... 226,158
Demand notes issued to the U.S.
Treasury ........................... 204,987
Trading liabilities .................. 1,437,445
Other borrowed money:
With original maturity of one year
or less .......................... 2,312,556
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,014,717
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,721,291
-----------
Total liabilities .................... 48,095,648
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 7,030
Cumulative foreign currency transla-
tion adjustments .................. ( 9,916)
-----------
Total equity capital ................ 4,024,812
-----------
Total liabilities and equity
capital ........................... $52,120,460
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my knowledge
and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
- -------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 25.3
Form T-1 Statement of Eligibility of The Bank of
New York under the New Guarantee for the benefit of
holders of New Capital Securities of ML Capital Trust I
<PAGE> 2
EXHIBIT 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
--------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------------
ML BANCORP, INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2752439
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Aldwyn Center
Lancaster Avenue & Route 320
Villanova, Pennsylvania 19085
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of Series B Capital Securities of
ML Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE> 3
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY
TO WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 4
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of July, 1997.
THE BANK OF NEW YORK
By: /S/THOMAS E. TABOR
----------------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
-4-
<PAGE> 6
EXHIBIT 7
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................ $ 6,024,605
Interest-bearing balances .......... 808,821
Securities:
Held-to-maturity securities ........ 1,071,747
Available-for-sale securities ...... 3,105,207
Federal funds sold in domestic offices
of the bank: ....................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................31,962,915
LESS: Allowance for loan and
lease losses ..............635,084
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ...... 1,539,612
Premises and fixed assets (including
capitalized leases) ................ 692,317
Other real estate owned .............. 22,123
Investments in unconsolidated
subsidiaries and associated
companies .......................... 213,512
Customers' liability to this bank on
acceptances outstanding ............ 985,297
Intangible assets .................... 590,973
Other assets ......................... 1,487,903
-----------
Total assets ......................... $52,120,460
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,929,642
Noninterest-bearing ......11,245,050
Interest-bearing .........14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,852,809
Noninterest-bearing .........552,203
Interest-bearing .........12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the
bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,360,877
Securities sold under agreements
to repurchase..................... 226,158
Demand notes issued to the U.S.
Treasury ........................... 204,987
Trading liabilities .................. 1,437,445
Other borrowed money:
With original maturity of one year
or less .......................... 2,312,556
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,014,717
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,721,291
-----------
Total liabilities .................... 48,095,648
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 7,030
Cumulative foreign currency transla-
tion adjustments .................. ( 9,916)
-----------
Total equity capital ................ 4,024,812
-----------
Total liabilities and equity
capital ........................... $52,120,460
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my knowledge
and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
- -------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 99.1
Form of Letter of Transmittal
<PAGE> 2
EXHIBIT 99.1
LETTER OF TRANSMITTAL
ML CAPITAL TRUST I
Offer to Exchange its
9.875% Series B Capital Securities
(Liquidation Amount $1,000 per Capital Security)
which have been registered under the Securities Act of 1933
for any and all of its outstanding
9.875% Series A Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Pursuant to the Prospectus
dated July __, 1997
--------------
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON AUGUST __, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
--------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
------------------------------- ------------------------------
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Department Ground Level
Odell Romeo New York, New York 10286
Attention: Reorganization Department
Odell Romeo
</TABLE>
Confirm by Telephone
or for Information call:
(212) 815-6337
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 815-6339
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO
A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE
THIS LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old
Capital Securities (as defined below) either if (i) Old Capital Securities are
to be forwarded herewith or (ii) tenders of Old Capital Securities are to be
made by book-entry transfer to an account maintained by The Bank of New York
(the "Exchange Agent")
<PAGE> 3
at The Depository Trust Company ("DTC") pursuant to the procedures set forth in
"The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
Holders of Old Capital Securities whose certificates (the
"Certificates") for such Old Capital Securities are not immediately available
or who cannot deliver their Certificates and all other required documents to
the Exchange Agent on or prior to the Expiration Date (as defined in the
Prospectus) or who cannot complete the procedures for book-entry transfer on or
prior to the Expiration Date, must tender their Old Capital Securities
according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
(See Instruction 4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
If blank, please print name and address of registered Old Capital Securities tendered
holder. (Attach additional list if necessary)
- ------------------------------------------------------------------------------------------------------------------------------------
Liquidation Amount of
Aggregate Old Capital Securities
Liquidation Amount Tendered
Certificate of Old Capital (if less than all are
Number(s)* Securities tendered)**
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
TOTAL
AMOUNT
TENDERED:
- ------------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in denominations of $100,000 and integral multiples of $1,000 in
excess thereof, provided that if any Old Capital Securities are tendered for exchange in part, the untendered principal amount
thereof must be $100,000 or any integral multiple of $1,000 in excess thereof. All Old Capital Securities held shall be deemed
tendered unless a lesser number is specified in this column.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
----------------------------------------------
DTC Account Number
---------------------------------------------------------
Transaction Code Number
----------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name of Registered Holder(s)
-----------------------------------------------
Window Ticket Number (if any)
----------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------
Name of Institution which Guaranteed Delivery
------------------------------
If Guaranteed Delivered is to be made By Book-Entry Transfer:
Name of Tendering Institution
------------------------------
DTC Account Number
-----------------------------------------
Transaction Code Number
------------------------------------
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NONEXCHANGED OR
NONTENDERED OLD CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE
DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
----------------------------------------------------------------------
Address:
-------------------------------------------------------------------
-------------------------------------------------------------------
Area Code and Telephone Number:
--------------------------------------------
Contact Person:
------------------------------------------------------------
3
<PAGE> 5
Ladies and Gentlemen:
The undersigned hereby tenders to ML Capital Trust I, a trust
created under the laws of Delaware (the "Trust") and ML Bancorp, Inc., a
Pennsylvania corporation (the "Corporation"), the above-described aggregate
Liquidation Amount of the Trust's 9.875% Series A Capital Securities (the "Old
Capital Securities") in exchange for a like aggregate Liquidation Amount of the
Trust's 9.875% Series B Capital Securities (the "New Capital Securities") which
have been registered under the Securities Act of 1933 (the "Securities Act"),
upon the terms and subject to the conditions set forth in the Prospectus, dated
July __, 1997 (as the same may be amended or supplemented from time to time,
the "Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or
any portion of the Old Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent also is acting as agent of the
Corporation and the Trust in connection with the Exchange Offer) with respect
to the tendered Old Capital Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Old Capital Securities to the Corporation or
the Trust together with all accompanying evidences of transfer and authenticity
to, or upon the order of, the Trust, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Capital Securities to be issued in exchange for
such Old Capital Securities, (ii) present Certificates for such Old Capital
Securities for transfer, and to transfer the Old Capital Securities on the
books of the Trust, and (iii) receive for the account of the Trust all benefits
and otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OLD CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Old Capital Securities. The Certificate number(s) of the Old Capital Securities
that the undersigned wishes to tender should be indicated in the appropriate
boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if Certificates are submitted for more
Old Capital Securities than are tendered or accepted for exchange, Certificates
for such nonexchanged or nontendered Old Capital Securities will be returned
(or, in the case of Old Capital Securities tendered by book-entry transfer,
such Old Capital Securities will be credited to an account maintained at DTC),
without expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and
in the Instructions herein will, upon the Corporation's and the Trust's
acceptance for exchange of such tendered Old Capital Securities, constitute a
binding agreement between the undersigned, the Corporation and the Trust upon
the terms and subject to the conditions of the Exchange Offer. The undersigned
4
<PAGE> 6
recognizes that, under certain circumstances set forth in the Prospectus, the
Corporation and the Trust may not be required to accept for exchange any of the
Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special
Issuance Instructions" below, the undersigned hereby directs that the New
Capital Securities be issued in the name(s) of the undersigned or, in the case
of a book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities, will be credited
to the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please deliver New Capital
Securities to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (i) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF THE CORPORATION OR THE TRUST WITHIN THE
MEANING OF RULE 405 UNDER THE SECURITIES ACT, (ii) ANY NEW CAPITAL SECURITIES
TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF
ITS BUSINESS, (iii) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH
ANY PERSON TO PARTICIPATE IN THE DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF NEW CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER
AND (iv) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT
ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE
COMMISSION TO THIRD PARTIES, THAT (a) SUCH OLD CAPITAL SECURITIES HELD BY THE
BROKER-DEALER ARE HELD ONLY AS A NOMINEE OR (b) SUCH OLD CAPITAL SECURITIES
WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE
PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING
BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW CAPITAL
SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO
EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR,
IF EARLIER, WHEN ALL SUCH NEW CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH
PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED
OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AND AS A RESULT OF MARKET-MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH
OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT,
UPON RECEIPT OF NOTICE FROM THE CORPORATION OR THE TRUST OF THE OCCURRENCE OF
ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING
BROKER-DEALER WILL SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE
PROSPECTUS UNTIL THE CORPORATION AND THE TRUST HAVE AMENDED OR SUPPLEMENTED THE
PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF
THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR
THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. IF THE CORPORATION OR THE TRUST
GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW CAPITAL SECURITIES, IT SHALL
EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING
BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE
OF NEW CAPITAL SECURITIES BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND
INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN
PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR
AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW CAPITAL SECURITIES OR
TO AND INCLUDING THE DATE ON WHICH THE CORPORATION OR THE TRUST HAS GIVEN
NOTICE THAT THE SALE OF NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY
BE.
5
<PAGE> 7
As a result, a Participating Broker-Dealer who intends to use the
Prospectus in connection with resales of New Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must notify
the Corporation and the Trust, or cause the Corporation and the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided above or may be
delivered to the Exchange Agent at the address set forth in the Prospectus
under "The Exchange Offer--Exchange Agent."
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive Distributions on such Old Capital
Securities and the undersigned waives the right to receive any Distribution on
such Old Capital Securities accumulated from and after March 10, 1997.
Accordingly, holders of New Capital Securities as of the record date for the
payment of Distributions on September 1, 1997 will be entitled to Distributions
accumulated from and after March 10, 1997.
All authority herein conferred or agreed to be conferred in this
Letter of Transmittal shall survive the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the
heirs, executors, administrators, personal representatives, trustees in
bankruptcy, legal representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
6
<PAGE> 8
- -------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Please Complete Substitute Form W-9 Below)
(Note: Signature(s) must be guaranteed if required by Instruction 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificates(s) for the Old Capital Securities hereby tendered or on a security
position listing, or by any person(s) authorized to become the registered
holder(s) by endorsements and documents transmitted herewith (including such
opinions of counsel, certificates and other information as may be required by
the Corporation, the Trust or the Exchange Agent to comply with the
restrictions on transfer applicable to the Old Capital Securities). If
signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instruction 5.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date___________________, 1997
Name(s)
------------------------------------------------------------------------
(PLEASE PRINT)
- -------------------------------------------------------------------------------
Area Code(s) and Telephone Number
----------------------------------------------
- -------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 5)
Authorized Signature
-----------------------------------------------------------
Name
---------------------------------------------------------------------------
(PLEASE PRINT)
Date , 1997
-------------------
Capacity or Title
--------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
Address
------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
- -------------------------------------------------------------------------------
7
<PAGE> 9
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6) (See Instructions 1, 5 and 6)
To be completed ONLY if New Capital To be completed ONLY if New Capital
Securities and/or any Old Capital Securities Securities and/or any Old Capital
that are not tendered are to be issued in Securities that are not tendered are to be sent
the name of someone other than the registered to someone other than the registered holder of
holder of the Old Capital Securities whose name(s) the Old Capital Securities whose name(s) appear(s)
appear(s) above. above, or to the registered holder(s) at an address
other than that shown above.
Issue:
Mail:
[ ] New Capital Securities to:
[ ] Old Capital Securities not tendered to: [ ] New Capital Securities to:
[ ] Old Capital Securities not tendered to:
Name
-------------------------------------- Name
(PLEASE PRINT) ------------------------------------------
(PLEASE PRINT)
Address Address
----------------------------------- ---------------------------------------
- ------------------------------------------ ----------------------------------------------
- ------------------------------------------ ----------------------------------------------
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
- ----------------------------------------------- ----------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.) (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if
(a) tenders are to be made pursuant to the procedures for tender by book-entry
transfer set forth under "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus and an Agent's Message is not delivered
or (b) Certificates are to be forwarded herewith. Timely confirmation of a
book-entry transfer of such Old Capital Securities into the Exchange Agent's
account at DTC, or Certificates as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its addresses set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer also
may be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a confirmation of
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal (including the
representations contained herein) and that the Trust and the Corporation may
enforce the Letter of Transmittal against such participant. Old Capital
Securities may be tendered in whole or in part in the Liquidation Amount of
$100,000 (100 Capital Securities) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Capital Securities are tended for exchange
in part, the untendered Liquidation Amount thereof must be $100,000 (100
Capital Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) who
cannot complete the procedures for delivery by book-entry transfer on or prior
to the Expiration Date, (ii) who cannot deliver their Old Capital Securities,
this Letter of Transmittal and all other required documents to the Exchange
Agent on or prior to the Expiration Date or (iii) whose Old Capital Securities
are not immediately available, may tender their Old Capital Securities by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth under "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Pursuant to such procedures: (a) such tender must be made by or through an
Eligible Institution (as defined below); (b) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made
available by the Corporation, must be received by the Exchange Agent on or
prior to the Expiration Date; and (c) the Certificates (or a book-entry
confirmation (as defined above and in the Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Old Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
9
<PAGE> 11
Neither the Corporation nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant in
DTC whose name appears on a security position listing as the owner of the Old
Capital Securities) of Old Capital Securities tendered herewith, unless such
holder(s) has completed either the box entitled "Special Issuance Instructions"
or the box entitled "Special Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate
number(s) and/or the Liquidation Amount of Old Capital Securities and any other
required information should be listed on a separate signed schedule which is
attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital
Securities will be accepted only in the principal amount of $100,000 (100
Capital Securities) and integral multiples of $1,000 in excess thereof,
provided that if any Old Capital Securities are tendered for exchange in part,
the untendered principal amount thereof must be $100,000 (100 Capital
securities) or any integral multiple of $1,000 in excess thereof. If less than
all the Old Capital Securities evidenced by any Certificate submitted are to be
tendered, fill in the Liquidation Amount of Old Capital Securities which are to
be tendered in the box entitled "Liquidation Amount of Old Capital Securities
Tendered (if less than all are tendered)." In such case, a new Certificate(s)
for the remainder of the Old Capital Securities that were evidenced by your Old
Certificate(s) will be sent to the holder of the Old Capital Securities,
promptly after the Expiration Date, unless the appropriate boxes on this Letter
of Transmittal are completed. All Old Capital Securities represented by
Certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration Date. In
order for a withdrawal to be effective on or prior to that time, a written or
facsimile transmission of such notice of withdrawal must be received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if
Certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the Certificate
for the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If Certificates for the Old Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such Certificates for the Old Capital
Securities, the tendering holder must submit the serial numbers shown on the
particular Certificates for the Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth under
"The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus, the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Old Capital Securities, in
which case a notice of withdrawal will be effective if delivered to the
Exchange Agent by written or facsimile transmission on or prior to the
Expiration Date. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed validly
tendered for purposes of the Exchange Offer, but may be retendered at any
subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer--Procedures
for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the
Corporation and the Trust, in their sole discretion, whose determination shall
be final and binding on all parties. None of the Corporation, the Trust, any
affiliates or assigns of the Corporation and the Trust, the Exchange Agent nor
any other person shall be under any duty to give any notification of any
irregularities in any
10
<PAGE> 12
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof without cost to such holder
promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Old Capital Securities tendered hereby, the signature(s) must
correspond exactly with the name(s) as written on the face of the
Certificate(s) without alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Corporation and the Trust, in their sole
discretion, of such persons' authority to so act.
When this Letter of Transmittal is signed by the registered
holder(s) of the Old Capital Securities listed and transmitted hereby, no
endorsement(s) of Certificate(s) or separate bond power(s) are required unless
New Capital Securities are to be issued in the name of a person other than the
registered holder(s). Signature(s) on such Certificate(s) or bond power(s) must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and other
information as the Corporation, the Trust or the Exchange Agent may require in
accordance with the restrictions on transfer applicable to the Old Capital
Securities. Signatures on such Certificates or bond powers must be guaranteed
by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if New Capital Securities are to be sent to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Certificates for Old Capital Securities not
exchanged will be returned by mail or, if tendered by book-entry transfer, by
crediting the account indicated above maintained at DTC.
See Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will determine, in
their sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by either of them not to be in proper form or the acceptance of
which, or exchange for, may, in the view of counsel to the Corporation and the
Trust, be unlawful. The Corporation and the Trust also reserve the absolute
right, subject to applicable law, to waive any of the conditions of the
Exchange Offer set forth in the Prospectus under "The Exchange Offer--Certain
Conditions to the Exchange Offer" or any conditions or irregularity in any
tender of Old Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Corporation's and the Trust's interpretation of the terms and conditions of
the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Old Capital Securities will be
deemed to have been validly made until all irregularities with respect to such
tender have been cured or waived. None of the Corporation, the Trust, any
affiliates or assigns of the Corporation, the Trust, the Exchange Agent, or any
other person shall be under any duty to give notification of any irregularities
in tenders or incur any liability for failure to give such notification.
11
<PAGE> 13
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent at
its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31%
backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form
W-9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60 day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g.,
social security number or employer identification number) of the registered
owner of the Old Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Old Capital Securities. If the Old
Capital Securities are registered in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, New Capital Securities are to be delivered
to, or are to be issued in the name of, any person other than the registered
holder of the Old Capital Securities tendered, or if a transfer tax is imposed
for any reason other than the exchange of Old Capital Securities in connection
with the Exchange Offer, then the amount of any such transfer tax (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption
12
<PAGE> 14
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO
THE EXPIRATION DATE.
13
<PAGE> 15
TO BE COMPLETED BY ALL
TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: ML CAPITAL TRUST I
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------
SUBSTITUTE Part 1 - PLEASE PROVIDE TIN________________________
Form W-9 YOUR TIN IN THE BOX AT Social Security Number or
RIGHT AND CERTIFY BY Employer Identification
SIGNING AND DATING BELOW Number
------------------------------------------------------------
Department of the Treasury Part 2
Internal Revenue Service Awaiting TIN [ ]
-----------------------------
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT (1) the number shown on this form is my correct
taxpayer identification number (or I am waiting for a
number to be issued to me), (2) I am not subject to backup
withholding either because (i) I am exempt from backup
withholding, (ii) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has notified me
that I am no longer subject to backup withholding, and (3)
any other information provided on this form is true and
correct.
Payer's Request for Taxpayer
Identification Number (TIN) SIGNATURE_______________________________________
and Certification DATE____________________________________________
You must cross out item (iii) in Part (2) above if you
have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or
dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to
backup withholding.
- -------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all payments made to me on account of the New Capital
Securities shall be retained until I provide a taxpayer identification number
to the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments made
to me thereafter will be withheld and remitted to the Internal Revenue Service
until I provide a taxpayer identification number.
Signature Date
------------------------------------ ---------------------------
- --------------------------------------------------------------------------------
14
<PAGE> 1
EXHIBIT 99.2
Form of Notice of Guaranteed Delivery
<PAGE> 2
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
9.875% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
ML CAPITAL TRUST I
UNCONDITIONALLY GUARANTEED BY ML BANCORP, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i) the
procedures for delivery by book-entry transfer cannot be completed on or prior
to the Expiration Date (as defined in the Prospectus referred to below), (ii)
certificates for the Trust's (as defined below) 9.875% Series A Capital
Securities (the "Old Capital Securities") are not immediately available or
(iii) Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Bank of New York (the "Exchange Agent") on
or prior to the Expiration Date. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for
Tendering Old Capital Securities" in the Prospectus.
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
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By Registered or Certified Mail: By Hand or Overnight Delivery:
------------------------------- -----------------------------
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Department Ground Level
Odell Romeo New York, New York 10286
Attention: Reorganization Department
Odell Romeo
</TABLE>
Confirm by Telephone
or for Information call:
(212) 815-6337
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 815-6339
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA A
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES.
IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ML Capital Trust I, a trust created under
the laws of Delaware (the "Trust"), upon the terms and subject to the
conditions set forth in the Prospectus dated July __, 1997 (as the same may be
amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, the aggregate liquidation amount of Old
Capital Securities set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering Old Capital Securities."
<TABLE>
<S> <C>
Aggregate Liquidation Amount Name(s) of Registered Holder(s):
Tendered:
--------------------------------------- ------------------------------------------------
Certificate No(s). (if available):
-------------- Address(es):
- ------------------------------------------------ ------------------------------------------------
If Old Capital Securities will be tendered by
book-entry transfer, provide the following ------------------------------------------------
information: Area Code and Telephone Number(s):
-------------
DTC Account Number:
----------------------------- ------------------------------------------------
Date: Signature(s):
------------------------------------------- -----------------------------------
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depository Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within three business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
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<S> <C>
Name of Firm:
---------------------------------- -----------------------------------------------
(Authorized Signature)
Address:
--------------------------------------- Title:
------------------------------------------
- -----------------------------------------------
(Zip Code) Name:
Area Code and ------------------------------------------
Telephone Number: (Please type or print)
------------------------------
Date:
------------------------------------------
</TABLE>
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF GUARANTEED
DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE PURSUANT TO,
AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
2
